Question

1. The following is selected raw data financial information from AFI Corp. for its fiscal year ended January 29, 2011 ($ millions):

Revenue                                                           $ 3,469

Cash from operating activities                             392

Cash, beginning of year                                         670                                                    

Noncash assets                                                    2,122

Cash from financing activities                            (143)

Cost of goods sold                                               1,257

Total expenses (other than COGS)                   2,062

Total liabilities                                                      1,057

Cash from investing activities                              (93)

1. How much cash does the company have at the end of the year ?
2. What is the total stockholders’ equity for the company ?
3. Prepare a balance sheet, income statement, and statement of cash flows for the FY January 2011. (Use the year-end balance instead of the average for assets and equity.)
4. Compute the following ratios:

1. Gross profit margin
2. Net profit margin
3. Return on assets
4. Return on equity

Answer 1

a).

Cash at the end of the year = Cash from operating activities + Cash from Investing activities + Cash from Financing activities + Cash at the beginning of the year

=$392 + (-$93) + (-$143) + 670

= $ 826

b). Total Stockholder's Equity = (Cash at the end of the year + Non-Cash Assets) - Total Liabilities

=($826 + $2122) - $1057

=$1891

c). Prepare a income statement, balance sheet and statement of cash flows for the FY January 2011

- Income Statment for the FY January 2011

Particular	Amount in $
Revenue	3469
Less: Cost of goods sold	(1257)
Gross Profit	2,212
Less: Total expenses (other than COGS)	(2,062)
Net Income	150

- Balance Sheet for the FY January 2011

Particular	Amount in $	Particular	Amount in $
Assets		Liabilities & Equities
Cash	826	Total Liabilities	1057
Non- Cash assets	2,122	Total Stockholder's Equity	1891
Total Assets	2,948	Total Liabilities & Equities	2,948

- Statement of Cash Flows for the FY January 2011:-

Particular	Amount in $
Cash from operating activities	392
Cash from Investing activities	(93)
Cash from Financing activities	(143)
Net cash used during the year	156
Add: Cash, beginning of year	670
Cash balance at the end of the year	826

d). Computing the following ratios:-

a. Gross profit margin = (Gross Profit /Net Income)*100

= (2212/3469)*100

= 63.7648%

b. Net profit margin =(Net Profit /Net Income)*100

=(150/3469)*100

= 4.3240%

c. Return on Assets = (Net Income/Total Assets)*100

=(150/2948)*100

= 5.0882%

d. Return on Equity =(Net Income/Total Stockholder's Equity)*100

=(150/1891)*100

= 7.9323%

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