……………5 f. What types of stock does the company have? How many shares are there outstanding for each type of stock for the most recent year presented?.......................................................................5 g. Does the company use the single-step or multiple-step income statement or a variation?........5 h. Does the income statement contain any separately reported items in any year presented, included discontinued operations or extraordinary items? If it does, describe the even that caused the item. Hint: there should be a related footnote……………………………………………………..6 i. Describe the trend in net income over the years presented……………………………………………………6 j.
Week 8 : Final Week - Final Exam Page 1 1. (TCO C) Which of the following characteristics do intangible assets possess? (Points : 5) Physical existence Claim to a specific amount of cash in the future Long-lived Held for resale 2. (TCO C) The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be (Points : 5) charged off in the current period. amortized over the legal life of the purchased patent.
Assuming Dell sales will grow 50% in 1997, how might the company finance this growth? Might it be able to finance this growth internally? How much would working capital need to be reduced and / or profit margin increased to achieve internal financing? What steps do you recommend the company take? 5.
The firm will maintain its present debt ratio of .5 when financing the new investment and expects sales to remain constant. The operating profit margin will rise to 13 percent. What will be the new operating return on assets for Salco after the plant’s renovation? c. Given that the plant renovation in part b occurs and Salco’s interest expense rises by $50,000 per year, what will be the return earned on the common stockholders’ investment? Compare this rate of return with that earned before the renovation.
Most company report EPS on the income statement immediately below Net Income or the notes to the financial statement. ii) EPS can be easily compare results over time. For example, in the first quarter of the year, the company earned net income of $ 3.5 million, compared to $ 3 million for the same quarter in the previous year. It is hard to know whether the increase is good for stockholders, because it is possible that the increase in net income was accompanied by an increase in the number of shares outstanding. By considering earnings on a per-share basic, they adjust for the effect of additional stock issue, resulting in a clearer figure of what increases mean for each investor.
Case Brief: Panera Bread With Panera Bread’s profit margins shrinking due to increases in commodities costs, the company must, for the first time, consider using debt to finance further expansion. There are three main questions that Panera will need to address: whether the company should use short-term debt, long-term debt, or equity financing to continue growing the company; whether or not the company should repurchase the $75 million of its own stock; and how the company should fund this repurchase. We will consider some of the advantages and disadvantages to each of these proposals using ratio and financial statement analysis. Before we can begin our analysis, we must settle on some assumptions. We assume that revenue will grow at a rate of 25% over the next two years but will then slow to a 5% growth rate thereafter.
Tax savings + A.T. cost savings) each year [pic]2. What is the project’s NPV? Explain the economic rationale behind the NPV. Could the NPV of this particular project be different for GP Manufacturing than for one of Chino Material Systems Inc.’s other potential customers? Explain.
c. Timeline: 0 1 2 5 2000 FV5 = 2, 000 × 1.15 = 3, 221.02 FV= ? d. 4-4. Because in the last 5 years you get interest on the interest earned in the first 5 years as well as interest on the original $2,000. What is the present value of $10,000 received
Generally, profitability includes Gross Profit on Sales, Return on Sales, Return on Assets, and Return on Equity. Since we will talk about Return on Equity based on DuPont System in later section explicitly, this section picks out Return on Assets and focus on it. Return on Assets(ROA) is Operating Income(OI) divided by Total Assets(TA). ROA measures how effectively the company manages its assets to earn profits. Hasbro: According to Figure 1, the ROA of Hasbro has a gradually upward trend from 6.1204% in 2004 to 10.5148% in 2007 and it decreases to 9.5777% in 2008.