| b. | Commercial paper issued to finance inventory. | c. | Current maturities of long term debt. | d. | Accounts receivable generated by sales on credit. | e. | Inventory purchased with cash.
Common Stockholder's Equity) | | | | 8.46% | 2,430,872 ÷ (29,946,92 + 27,517,328 ÷ 2) 28,732,160 = 0.84604568 or 8.46 | Solvency Ratios A formulation used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. The formula is calculated by adding short-term and long-term debt and
|Real Estate Depreciation |Most recently observed depreciation of real estate | |Plant and Equipment |Balance sheet value | |Plant and Equipment Investments | | |Plant and Equipment Depreciation | | |Financial Fixed Assets |Long term financial assets of the client | |Current Assets |Current assets of the client | |Trade debtors |Trade credit granted by the client to others | |Liquid Assets |Balance sheet item of the client
Problem 4-6 (Capital structure analysis) The Liabilities and owner’s equity for Campbell Industries is found below: Accounts Payable = $544,000 Notes Payable = $242,000 Current Liabilities = $786,000 Long-Term Debt = $1,300,000 Common Equity = $4,697,000 Total Liabilities and Equity = $6,783,000 A. What percentage of the firm’s assets does the firm finance using debt (liabilities)? (Round to one decimal place) B. If Campbell was to purchase a new warehouse for $1.1 million and finance it entirely with long-term debt, what would be the firm’s new debt ration? Solution: Total liabilities and equity = Total Assets = $6,783,000 Long term debt = $1,300,000 Current liabilities = $786,000 Total liabilities = $2,086,000 The fraction of the firm’s assets financed using debt = Debt Total Assets = $2,786,000 $6,783,000 = 30.75% If the firm purchase a new warehouse for $1.1 million and finance it entirely with long-term debt, the total liabilities and total assets would increase by the same amount.
The methods used in this assignment are the payback period, NPV, IRR, and describing factors if Caladonia Products were doing a lease versus a buy will also be considered. 12a-12e. Caladonia is considering two additional mutually exclusive projects. The cash flows associated with these projects are as follows: Year Project A Project B 0 -$100,000 -$100,000 1 32,000 0 2 32,000 0 3 32,000 0 4 32,000 0 5 32,000 $200,000 The required rate of return of these projects is 11%. Payback Period Payback period is a capital budgeting criterion measure, which promptly provides the number of years the project will return is original investment (Keown, Martin, Petty, & Scott, 2005, p.292).
What is the value of the shareholders' equity account for this firm? Shareholders' equity $_________ How much is net working capital? Net working capital $_________ FIN 571 complete paper here FIN 571 7. Shelton, Inc., has sales of $401,000, costs of $189,000, depreciation expense of
• Long-term debt is defined as a residual claim on a firm’s assets. • Net working capital equals current assets plus current liabilities. • Current liabilities are debts that must be repaid in 18 months or less. • Tangible assets are fixed assets such as patents. • Current assets are assets with short lives, such as inventory.
The cost of additions and substantial improvements to property, plant and equipment is capitalized (www.at&t.com). The cost of maintenance and repairs of property, plant and equipment is charged to operating expenses (www.at&t.com). Property, plant and equipment is depreciated using straight-line methods over their estimated economic lives (www.at&t.com). Goodwill represents the excess of consideration paid over the fair value of net assets acquired in business combinations (at&t.com). Goodwill and other indefinite-lived intangible assets are not amortized but are tested at least annually for impairment (www.at&t.com).
In addition, “consumers have the basic right to be protected from the loss or injury caused on account of defective goods”. This becomes an ethical issue when Consolidated did not inform consumers because of fear of losing the contract or in other words, “profit” all while knowingly putting the lives of others at risk is morally and ethically wrong. (Schooling) For this issue as a resolution, lives should not have been placed at risk in the first place. A product recall should have been done to replace the flak jacket before anything occurred. This would have caused some negative media but in the long run Consolidated would have been
Bonds c. Preferred stock d. a & b e. b & c Answer: e Retained earnings are internal source of fund. Issuing bonds, preferred stocks, and common stocks are external source of fund, which have the floation cost. 2. The costs of financing from different sources are as follows: IEF = 5%, EEF=6%, cost of debt before tax = 5%, tax rate=20%, the size of retained earnings=$30m. The capital structure is: We=40% and Wd=60%.