In: Finance
Answer the following questions:
Question G
A firm has the following balance sheet as June 14, 2018. What is its current ratio?
Cash |
$10,000 |
Inventory |
$25,000 |
Prepaid Expenses |
$10,000 |
Property, Plant, and Equipment |
$100,000 |
Goodwill |
$25,000 |
Total Assets |
$170,000 |
Accounts Payable |
$5,000 |
Accruals |
$15,000 |
Current Portion of Long Term Bonds Payable |
$25,000 |
Long Term Bonds Payable |
$50,000 |
Common Stock, Par |
$1,000 |
Common Stock, Paid in Capital |
$50,000 |
Retained Earnings |
$24,000 |
Total Liabilities and Equity |
$170,000 |
Question H
Using the information below, calculate the 2018 Operating Cash Flow.
2018 |
2017 |
||
Cash |
$ 10,000.00 |
$ 8,000.00 |
|
Inventory |
$ 25,000.00 |
$ 5,000.00 |
|
Prepaid Expenses |
$ 10,000.00 |
$ 5,000.00 |
|
Property, Plant, and Equipment |
$ 100,000.00 |
$ 110,000.00 |
|
Goodwill |
$ 25,000.00 |
$ 25,000.00 |
|
Total Assets |
$ 170,000.00 |
$ 153,000.00 |
|
Accounts Payable |
$ 5,000.00 |
$ 10,000.00 |
|
Accruals |
$ 15,000.00 |
$ 8,500.00 |
|
Current Portion of Long Term Bonds Payable |
$ 25,000.00 |
$ 7,000.00 |
|
Long Term Bonds Payable |
$ 50,000.00 |
$ 60,000.00 |
|
Common Stock, Par |
$ 1,000.00 |
$ 1,000.00 |
|
Common Stock, Paid in Capital |
$ 50,000.00 |
$ 50,000.00 |
|
Retained Earnings |
$ 24,000.00 |
$ 16,500.00 |
|
Total Liabilities and Equity |
$ 170,000.00 |
$ 153,000.00 |
|
Sales |
$ 100,000.00 |
$ 90,000.00 |
|
COGS |
$ 25,000.00 |
$ 20,000.00 |
|
Gross Profit |
$ 75,000.00 |
$ 70,000.00 |
|
Depreciation |
$ 20,000.00 |
$ 18,000.00 |
|
EBIT |
$ 55,000.00 |
$ 52,000.00 |
|
Interest |
$ 5,000.00 |
$ 10,000.00 |
|
EBT |
$ 60,000.00 |
$ 42,000.00 |
|
Taxes |
$ 12,600.00 |
$ 8,820.00 |
|
NI |
$ 47,400.00 |
$ 33,180.00 |
Question I
A firm's ROE has increased from 2017 to 2018. Using the information below, identify the ROE component that is responsible for the increase.
2018 |
2017 |
||
Cash |
$ 10,000.00 |
$ 8,000.00 |
|
Inventory |
$ 25,000.00 |
$ 5,000.00 |
|
Prepaid Expenses |
$ 10,000.00 |
$ 5,000.00 |
|
Property, Plant, and Equipment |
$ 100,000.00 |
$ 110,000.00 |
|
Goodwill |
$ 25,000.00 |
$ 25,000.00 |
|
Total Assets |
$ 170,000.00 |
$ 153,000.00 |
|
Accounts Payable |
$ 5,000.00 |
$ 10,000.00 |
|
Accruals |
$ 15,000.00 |
$ 8,500.00 |
|
Current Portion of Long Term Bonds Payable |
$ 25,000.00 |
$ 7,000.00 |
|
Long Term Bonds Payable |
$ 50,000.00 |
$ 60,000.00 |
|
Common Stock, Par |
$ 1,000.00 |
$ 1,000.00 |
|
Common Stock, Paid in Capital |
$ 50,000.00 |
$ 50,000.00 |
|
Retained Earnings |
$ 24,000.00 |
$ 16,500.00 |
|
Total Liabilities and Equity |
$ 170,000.00 |
$ 153,000.00 |
|
Sales |
$ 100,000.00 |
$ 90,000.00 |
|
COGS |
$ 25,000.00 |
$ 20,000.00 |
|
Gross Profit |
$ 75,000.00 |
$ 70,000.00 |
|
Depreciation |
$ 20,000.00 |
$ 18,000.00 |
|
EBIT |
$ 55,000.00 |
$ 52,000.00 |
|
Interest |
$ 5,000.00 |
$ 10,000.00 |
|
EBT |
$ 60,000.00 |
$ 42,000.00 |
|
Taxes |
$ 12,600.00 |
$ 8,820.00 |
|
NI |
$ 47,400.00 |
$ 33,180.00 |
Question J
A firm has a ROA of 10% and a debt ratio of 75%. The firm has sales of $50,000 and net income of $10,000. How much equity does the firm have?