Question

In: Finance

PLEASE SHOW CALCULATIONS 2017 2018 BALANCE SHEETS: Assets: Cash 74,181 66,301 Accounts Receivable     35,673 48,995...

PLEASE SHOW CALCULATIONS

2017 2018

BALANCE SHEETS:

Assets:

Cash 74,181 66,301

Accounts Receivable     35,673 48,995

Inventory 4,855 3,986

Other Current Assets 13,936 12,057

Fixed Assets, net 33,783 41,304

Investments 212,891 233,082

Total Assets    375,319 405,725

Liabilities and Equity:

Accounts Payable    44,242 55,888

Other Current Liabilities     50,226 55,416

Long-Term Debt 103,703 102,519

Other Non-current Liabilities   43,251 48,209

Common Stock 35,567 33,293

Retained Earnings   98,330 110,400

Total Liabilities and Equity   375,319 405,725

INCOME STATEMENT:

FY 2018

Revenue 265,595

Cost of Goods Sold 163,756

General and Administrative 14,793

Depreciation Expense 10,903

Earnings Before Interest and Taxes   76,143

Interest Expense 3,240

Pretax Net Income 72,903

Income Taxes 13,372

Net Income 59,531

Please assist with the following questions based on the above information. Thank you

1.Assuming that all Apple’s sales in fiscal 2018 were on credit, how many days, on average, did it take Apple to sell its inventory in 2018? (For balance sheet accounts, use the average of the beginning and end-of-year balances).

2.. Assuming that all Apple’s sales in fiscal 2018 were on credit, what was the company’s Days Sales Outstanding in 2018? (For balance sheet accounts, use the average of the beginning and end-of-year balances)

3. How much did Apple pay out in dividends during fiscal 2018?

4. What was Apple’s dividend payout ratio during fiscal 2018?

5. What was Apple’s Equity Multiplier for 2018?

Solutions

Expert Solution

1. We are asked here to find the Inventory Turnover (in days) for the year 2018

Inventory Turnover Ratio for the year 2018 (times) = Cost of Goods Sold / Average Inventory

= COGS / [(Opening Inventory + Closing Inventory) / 2] = 163,756 / [ (4855+3986)/2] = 163,756 / 4420.5 = 37.04468 times

No. of days taken to sell inventory = 365 days / Inventory Turnover Ratio = 365 / 37.04465 = 9.85 days

Note: Cost of goods sold is a better measure than sales, as sales also contains the profit portion, whereas inventory and cost of goods sold are both valued at cost. Further, it does not matter for the calculations of Inventory turnover whether the sales are in cash or credit, as we are asked in what time inventories are sold. We are not asked that in how much time sales amount is recovered from customers.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------

2. Day Sales Outstanding is a measure which tells the number of days it takes to collect the credit sales amount. For this calculation, we have to take the credit sales figure compulsorily.

We are advised to take average of the beginning and end period balances for balance sheet accounts.

Day Sales Outstanding for year 2018 = (Average Account Receivables / Credit Sales in 2018) * No. of Days in the year 2018

= [ (35,673 + 48,995) / 2] / 265,595 *365 = 42334 / 265595 *365 = 58.18 Days

Thus, it takes Apple, Inc. around 58.18 days to collect its account receivables.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------

3. Amount Paid in Dividend during year 2018 = Net Income in 2018 - Incremental Retained Earnings

= Net Income in 2018 - (Retained Earnings Balance in 2018 - Retained Earnings Balance in 2017)

= 59531 - ( 110,400 - 98,330 ) = 47,461

Note: Net Income is earned in an year after payment of taxes. part of it is paid as dividends and the remaining balance is retained earnings. That is, Net Income = Dividends paid + Transferred to Retained Earnings. From this we understand that Dividends paid = Net Income in 2018 - Incremental Retained Earnings.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------

4. Dividend Payout Ratio is measures the percentage of net income which is paid as dividend to the shareholders of the company.

Dividend Payout Ratio = (Dividends Paid / Net Income for Year 2018) *100 = (47,461 / 59,531 ) *100 = 79.72%

--------------------------------------------------------------------------------------------------------------------------------------------------------------------

5. Equity Multiplier tells how the assets of a company are financed. It is measured as Total Assets / Net Shareholders' equity. Thus, a higher Equity Multiplier means less assets are financed using equity and more assets are financed by debt (as the shareholders' equity is in denominator), that is, a higher financial leverage.

Equity Multiplier for 2018 = Total Assets / Net Shareholders' Equity = Total Assets / (Common Stock + Retained Earnings)

= 405,725 / (33,293 + 110,400) = 405,725 / 143,693 = 2.82 times

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Boca Inc. Balance Sheets December 31 Assets 2018 2017 Cash 110,800 48,400 Accounts Receivable 38,000 87,800...
Boca Inc. Balance Sheets December 31 Assets 2018 2017 Cash 110,800 48,400 Accounts Receivable 38,000 87,800 Inventory 112,500 102,850 Prepaid Expenses 26,000 28,400 Long-term Investments 109,000 138,000 Plant Assets 397,000 242,500 Accumulated depreciation -50,000 -52,000 Total 743,300 595,950 Liabilities and Stockholders' Equity Accounts Payable 72,000 67,300 Accrued Expenses Payable 13,500 21,000 Dividends Payable 3,000          - Bonds Payable 170,000 146,000 Common Stock 262,000 175,000 Retained Earnings 222,800 186,650 Total 743,300 595,950 Additional Information: 1. Old plant assets having an original...
Boca Inc. Balance Sheets December 31 Assets 2018 2017 Cash 60,800 48,400 Accounts Receivable 87,800 38,000...
Boca Inc. Balance Sheets December 31 Assets 2018 2017 Cash 60,800 48,400 Accounts Receivable 87,800 38,000 Inventory 102,850 112,500 Prepaid Expenses 28,400 26,000 Long-term Investments 138,000 109,000 Plant Assets 347,000 242,500 Accumulated depreciation (50,000) (52,000) Total 714,850 524,400 Liabilities and Stockholders' Equity Accounts Payable 67,300 72,000 Accrued Expenses Payable 21,000 13,500 Dividends Payable 3,000 - Bonds Payable 170,000 146,000 Common Stock 262,000 175,000 Retained Earnings 191,550 117,900 Total 714,850 524,400 Additional Information: 1. Old plant assets having an original cost...
Balance Sheets Assets 2019 2018 Cash and equivalents $100   $85   Accounts receivable 275   300   Inventories 375  ...
Balance Sheets Assets 2019 2018 Cash and equivalents $100   $85   Accounts receivable 275   300   Inventories 375   250         Total current assets $750   $635   Net plant and equipment 2,300   1,490   Total assets $3,050   $2,125   Liabilities and Equity Accounts payable $150   $85   Accruals 75   50   Notes payable 150   75         Total current liabilities $375   $210   Long-term debt 450   290         Total liabilities 825   500   Common stock 1,225   1,225   Retained earnings 1,000   400   Common equity 2,225   1,625   Total liabilities and equity $3,050   $2,125   Income Statements 2019...
CHENG INC. Comparative Balance Sheets December 31 Assets 2017 2016 Cash $118,000 $47,800 Accounts receivable 91,600...
CHENG INC. Comparative Balance Sheets December 31 Assets 2017 2016 Cash $118,000 $47,800 Accounts receivable 91,600 32,200 Inventory 113,000 102,900 Prepaid expenses 29,400 26,000 Investments 141,000 113,500 Equipment 265,700 241,600 Accumulated depreciation-equipment (46,000 ) (51,400 ) Total $712,700 $512,600 Liabilities and Stockholders’ Equity Accounts payable $111,300 $67,900 Accrued expenses payable 16,100 17,000 Bonds payable 110,700 149,500 Common stock 219,500 174,200 Retained earnings 255,100 104,000 Total $712,700 $512,600 CHENG INC. Income Statement For the Year Ended December 31, 2017 Sales revenue$391,900...
Below are the 2018 and 2019 year-end balance sheets for Tran Enterprises: Assets: 2018 2017 Cash...
Below are the 2018 and 2019 year-end balance sheets for Tran Enterprises: Assets: 2018 2017 Cash $ 200,000 $ 170,000 Accounts receivable 864,000 700,000 Inventories 2,000,000 1,400,000 Total current assets $3,064,000 $2,270,000 Net fixed assets 6,000,000 5,600,000 Total assets $9,064,000 $7,870,000 Liabilities and equity: Accounts payable $1,400,000 $1,090,000 Notes payable to bank 1,600,000 1,800,000 Total current liabilities $3,000,000 $2,890,000 Long-term debt 2,400,000 2,400,000 Common stock 3,000,000 2,000,000 Retained earnings 664,000 580,000 Total common equity $3,664,000 $2,580,000 Total liabilities and equity...
Below are the year-end balance sheets for Lowell Enterprises: Assets: 2018 2017 Cash $   200,000 $  ...
Below are the year-end balance sheets for Lowell Enterprises: Assets: 2018 2017 Cash $   200,000 $   170,000 Accounts receivable 864,000 700,000 Inventories 2,000,000 1,400,000     Total current assets $3,064,000 $2,270,000 Net fixed assets 6,000,000 5,600,000 Total assets $9,064,000 $7,870,000 Liabilities and equity: Accounts payable $1,400,000 $1,090,000 Notes payable 1,600,000 1,800,000     Total current liabilities $3,000,000 $2,890,000 Long-term debt 2,400,000 2,400,000 Common stock 3,000,000 2,000,000 Retained earnings      664,000      580,000     Total common equity $3,664,000 $2,580,000 Total liabilities and equity...
SMC, Inc. Balance Sheet December 31, 2017 Assets Cash ......................................................................................................... $34,500 Accounts receivable ...................................................................
SMC, Inc. Balance Sheet December 31, 2017 Assets Cash ......................................................................................................... $34,500 Accounts receivable ................................................................................ 25,000 Inventory .................................................................................................. 10,000 Supplies ................................................................................................... 200 Total assets.............................................................................................. $69,700 Liabilities and Stockholders’ Equity Liabilities: Accounts payable ............................................................................. $12,000 Salaries payable ............................................................................... 1,000 Income taxes payable ...................................................................... 3,675 Total liabilities.......................................................................................... $16,675 Stockholders’ equity: Capital stock (10,000 shares outstanding).................................... $25,000 Retained earnings ............................................................................ 28,025 Total stockholders’ equity ....................................................................... 53,025 Total liabilities and stockholders’ equity................................................ $69,700 SMC, Inc. Income Statement For the Year Ended December31,2017 Sales revenue .............................................................................................
SMOLIRA GOLF CORP. 2017 and 2018 Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017...
SMOLIRA GOLF CORP. 2017 and 2018 Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017 2018   Current assets   Current liabilities       Cash $ 24,056 $ 24,200       Accounts payable $ 23,284 $ 27,200       Accounts receivable 12,548 15,300       Notes payable 12,000 10,900       Inventory 25,592 27,200       Other 11,671 15,900         Total $ 62,196 $ 66,700         Total $ 46,955 $ 54,000   Long-term debt $ 90,000 $ 93,294   Owners’ equity       Common stock and paid-in surplus $ 42,000 $ 42,000       Accumulated retained earnings 208,936 242,706   Fixed assets...
PARROTHEAD ENTERPRISES 2017 and 2018 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017...
PARROTHEAD ENTERPRISES 2017 and 2018 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017 2018 Current assets $ 1,224 $ 1,331 Current liabilities $ 503 $ 559 Net fixed assets 4,994 6,021 Long-term debt 2,661 2,831 PARROTHEAD ENTERPRISES 2018 Income Statement Sales $ 15,442 Costs 7,162 Depreciation 1,381 Interest paid 400 a. What is owners' equity for 2017 and 2018? (Do not round intermediate calculations.) b. What is the change in net working capital for 2018? (Do not...
UX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s) 2018, 2017 Assets...
UX COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s) 2018, 2017 Assets :(Cash $67.... $37) (Accounts receivable $61.....$81) (Less: Allowance for uncollectible accounts:$(6)....$(5) )(Dividends receivable $4.....$3) (Inventory $89...$67 ) (Long-term investment $49...$27 ) (Land $143....$73 ) (Buildings and equipment $208...$284 )(Less: Accumulated depreciation $(42)....$(84) totals $573 ....$483   Liabilities : (Accounts payable $30....$54 ) (Salaries payable $4 ...$10 ) (Interest payable $6 ....$4 ) (Income tax payable $24.... $30 ) (Notes payable $70 ... 0 ) (Bonds...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT