Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation.  
  
a. Butters Corporation has a profit margin of 6 percent and its return on assets (investment) is 22.25 percent. What is its assets turnover? (Round your answer to 2 decimal places.)
  

  

b. If the Butters Corporation has a debt-to-total-assets ratio of 40.00 percent, what would the firm’s return on equity be? (Input your answer as a percent rounded to 2 decimal places.)
  

     

c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 25.00 percent? (Input your answer as a percent rounded to 2 decimal places.)
  

The balance sheet for Stud Clothiers is shown next. Sales for the year were $3,200,000, with 75 percent of sales sold on credit.

Compute the following ratios: (Use a 360-day year. Do not round intermediate calculations. Round your answers to 2 decimal places. Input your debt-to-total assets answer as a percent rounded to 2 decimal places.)

Frantic Fast Foods had earnings after taxes of $1,190,000 in 20X1 with 399,000 shares outstanding. On January 1, 20X2, the firm issued 27,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 24 percent.

a. Compute earnings per share for the year 20X1. (Round your answer to 2 decimal places.)
  

b. Compute earnings per share for the year 20X2. (Round your answer to 2 decimal places.)
  

Prepare an income statement for Franklin Kite Co. Take your calculations all the way to computing earnings per share. (Round EPS answer to 2 decimal places.)
  

Elite Trailer Parks has an operating profit of $285,000. Interest expense for the year was $30,500; preferred dividends paid were $28,900; and common dividends paid were $36,800. The tax was $68,500. The firm has 21,600 shares of common stock outstanding.  

a. Calculate the earnings per share and the common dividends per share for Elite Trailer Parks. (Round your answers to 2 decimal places.)  
  

b. What was the increase in retained earnings for the year?  
  

Quantum Technology had $726,000 of retained earnings on December 31, 20X2. The company paid common dividends of $32,600 in 20X2 and had retained earnings of $503,000 on December 31, 20X1.

a. How much did Quantum Technology earn during 20X2?
  

b. What would earnings per share be if 46,400 shares of common stock were outstanding? (Round your answer to 2 decimal places.)
  

Botox Facial Care had earnings after taxes of $340,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $74.80. In 20X2, earnings after taxes increased to $378,000 with the same 200,000 shares outstanding. The stock price was $83.00.

a. Compute earnings per share and the P/E ratio for 20X1. (The P/E ratio equals the stock price divided by earnings per share.) (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
  

b. Compute earnings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
  

c. Why did the P/E ratio change? (Do not round intemediate calculations. Input your answers as percents rounded to 2 decimal places.)
  

Stilley Corporation had earnings after taxes of $590,000 in 20X2 with 250,000 shares outstanding. The stock price was $46.10. In 20X3, earnings after taxes declined to $265,000 with the same 250,000 shares outstanding. The stock price declined to $32.30.

a. Compute earnings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
  

b. Compute earnings per share and the P/E ratio for 20X3. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
  

The Rogers Corporation has a gross profit of $724,000 and $283,000 in depreciation expense. The Evans Corporation also has $724,000 in gross profit, with $48,400 in depreciation expense. Selling and administrative expense is $243,000 for each company.  

a. Given that the tax rate is 40 percent, compute the cash flow for both companies.
  

   

b. Calculate the difference in cash flow between the two firms.

Question text

Interpreting the Accounts Receivable Footnote
Hewlett-Packard Company reports the following in its 2015 10-K report.

Footnotes to the company's 10-K provide the following additional information relating to its allowance for doubtful accounts.

(a) What is the gross amount of accounts receivables for Hewlett-Packard in fiscal 2015 and 2014?

(b)What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2015 and 2014? (Round your answers to two decimal places.)

(c)What amount of bad debts expense did Hewlett-Packard report each year 2013 through 2015 (ignore increase in allowance from acquisitions)? What amount was actually written off?

Which of the following statements describes how bad debts expense compares with the amounts of its accounts receivable actually written off?

Generally, HP has overestimated its accruals, which has deflated profit by the over-accrual of bad debts.

Generally, HP has underestimated its accruals, which has inflated profit by the under-accrual of bad debts.

The difference between bad debt expense and write-off during the three years is insignificant so it appears that profit has been fairly stated.

The difference between bad debt expense and write-off during the three years has inflated HPQ's cash flows reported.

(d)Compute Hewlett-Packard's write-offs as a percentage of the allowance account at the beginning of the year.
(Round your answers to two decimal places)
2015 write-offs as a percentage of beginning of year allowance: Answer%
2014 write-offs as a percentage of beginning of year allowance: Answer%
What inferences can we draw as a result of changes in the allowance for doubtful accounts from 2014 to 2015?

The allowance for uncollectible accounts has increased as a percentage of gross accounts receivable in 2015. We can , therefore, expect write-offs to increase.

HPQ's write-offs as a percentage of the allowance decreased from 2014-2015. By this measure it appears that HPQ is accurately accruing for anticipated credit losses.

The allowance for uncollectible accounts has decreased as a percentage of gross accounts receivable in 2015. This means that HPQ is over-stating its bad debt expense in the current year.

HPQ's write-offs as a percentage of the allowance increase from 2014 to 2015. This may imply that the allowance is too small.

7. Market value ratios

Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market-based ratios, relate to a firm’s observable market value, stock prices, and book values, integrating information from both the market and the firm’s financial statements.

Consider the case of Cold Goose Metal Works Inc.:

Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $95,000,000, and a current stock price of $14.75 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2,800,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,300,000).

If Cold Goose’s forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company’s management expect its stock price to be one year from now? (Note: Round intermediate calculations to four decimal places. Round the expected stock price to two decimal places.)

$12.22 per share

$15 per share

$9.17 per share

$15.28 per share

One year later, Cold Goose’s shares are trading at $47.12 per share, and the company reports the value of its total common equity as $20,285,200. Given this information, Cold Goose’s market-to-book (M/B) ratio is   . (Note: Do not round intermediate calculations.)

Is it possible for a company to exhibit a negative EPS and thus a negative P/E ratio?

No

Yes

Which of the following statements is true about market value ratios?

High P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.

Low P/E ratios could mean that the company has a great deal of uncertainty in its future earnings.

Save & Continue

Continue without saving

Credit card is a convenient medium to conduct transactions. However, according to The Star Online (2018), 47% of Malaysian youths have high credit card debts.

Q1. What are the causes of this phenomenon? What can we do to curb this? Write an essay of about 600-800 words.

• Use 6 paragraphs for your essay.

• Your essay should have an introduction, two (2) reasons Malaysian youths have high credit card debts, two (2) solutions to curb this situation and also a conclusion.

• Give your essay an appropriate title. You do not have to attach an essay outline for this essay.

Barings Bank collapsed about two decades ago as a result of derivative trading. Identify any other high profile corporate bankruptcy attributable to derivative trading and.
I.Describe the events that created the problem outlining the differences and similarities between Barings Bank and your chosen institution
II.What are the lessons that financial institutions, investors and regulators can learn from the occurrence of such events.

Question 1: choose the correct answer for the following

                a. which of the following securities has last priority of payment

                      a. warrant     b. Lease      c.Common stock     d. Bond

                b. Which of the following is the least likely source of venture capital money?

                      a. Private equity    b. Initial public offering    c.Corporate ventures     d. Angel money

Read the article and take a look at the filing (and letter linked within) to familiarize yourself with the news. In one paragraph, explain why this news is important to shareholders. After you have posted, you may feel free to read and respond to what others are saying (although not required). Please remember to keep the content of your posts respectful and constructive.

Questions you may want to consider:

• Where was the information originally sourced from? For example, was the information taken from an SEC filing, a press release, or some other source?
• Who might find the information in the article useful?
• Is there anything else going on in the business world right now that is related to this story?
• What are the business or economic implications?

ARTICLE BELOW:

"Wendy's Co. said it will bring back breakfast across its U.S. restaurants next year as fast-food chains compete to lure diners during more of the day.

The burger chain said Monday that it will spend $20 million to add more menu items and longer hours at its 5,813 domestic restaurants. Wendy's said it and its franchisees will hire some 20,000 workers to help roll out the expanded offerings.

Shares fell about 4% after hours to $21.01 when Wendy's said the investments had prompted it to adjust guidance for its current fiscal year. The company said it expects earnings per share adjusted for one-time items to decline between 3.5% and 6.5%, down from its previous forecast for growth of 3.5% to 7.0%.

Earlier

* McDonald's Tests Robot Fryers and Voice-Activated Drive-Throughs (June 20)

* McDonald's Makes Over All-Day Breakfast to Speed Up Wait Times (May 14)

Breakfast has become an increasingly competitive part of the day for major fast-food companies. McDonald's Corp. has pointed to competition in breakfast as a key area of concern. Guest growth in breakfast is starting to recover for McDonald's after a slide, the company has said, but progress remains slow.

"There's been a lot of new entrants into that space," McDonald's Chief Financial Officer Kevin Ozan said during a July call to discuss the company's most recent earnings report.

Wendy's currently sells breakfast items at about 300 restaurants after earlier efforts to expand nationwide were scrapped. The company abandoned a 2012 push into breakfast at more of its restaurants after a year. Too eclectic a mix of healthy and indulgent options as well as competition from McDonald's and Starbucks Corp. were seen as problems at the time, analysts said.

A Wendy's spokesperson said the company is confident in this launch. The new Wendy's morning menu features a bacon breakfast sandwich, a chicken biscuit and one of the chain's Frosty shakes made with coffee. Working those popular Wendy's items into breakfast foods will help the chain's menu stand out, Chief Executive Todd Penegor said on Monday."

The Nelson Company has $1,080,000 in current assets and $400,000 in current liabilities. Its initial inventory level is $280,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.5? Round your answer to the nearest cent. $ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.

Consider the three stocks in the following table.

1. Calculate the rate of return on an equally weighted index of the three stocks.

2. Calculate the rate of return on a price-weighted index of the three stocks.

3. Calculate the rate of return on a market-weighted index of the three stocks.

3. What benchmark would you use to calculate materiality? Why? ((a)Net Income, (b) Assets, (c) Revenue, or (d)Equity.) (Pick 1 letter & Explain why)

a. 5 percent to 10 percent of net income before taxes.

b. ½ percent to 1 percent of total assets.

c. ½ percent to 1 percent of total revenues.

d. ½-1 percent of total equity.

4. Would you use a higher percentage or a lower percentage for the benchmark you selected in Q3 above. (EX: 5% of Net Income vs 10% of Net Income)? Explain why?

5. Using the choices from Q3 & Q4 above calculate “overall materiality” for your audit for 2019? (ex: Benchmark %(1%) * Assets ($25m)= $250K (Overall Materiality)).

You just won the lottery. Congratulations! The jackpot is $85,000,000 paid in eight equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won ______ assuming annual interest rate of 11.00%. Show work or formula in excel.

Williamson Industries has $5 billion in sales and $1.6 billion in fixed assets. Currently, the company's fixed assets are operating at 90% of capacity.

1. What level of sales could Williamson Industries have obtained if it had been operating at full capacity? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Round your answer to the nearest cent.
   $
2. 
   
3. What is Williamson's target fixed assets/sales ratio? Round your answer to two decimal places.
   %
4. 
   
5. If Williamson's sales increase 13%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Round your answer to the nearest cent. Negative amount should be indicated by a minus sign. Do not round intermediate calculations.
   $