Sam Forbes and Jenny Hewes are senior vice-presidents of the First Creek Investment Council . They are co-directors of the company's pension fund management division, with Sam having responsibility for fixed income securities (primarily bonds) and Jneey being responsible for equity investments. A major new client has requested that council present an investment seminar to Executive Committee, and Forbes and Hewes, who will make the actual presentation, have asked you, a recent UCW graduate to help them.
to illustrate the common stock valuation process, Sam and Jenny have asked you to analyze the Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. You are to answer the following questions.
a. Describe briefly the legal rights and privileges of common stockholders.
b. Assume that Temp Force is a constant growth company whose last dividend (Do, which was paid yesterday) was $2.00, and whose dividend is expected to grow indefinitely at a 5 percent rate.
(1.) What is the firm’s expected dividend stream over the next 3 years?
(2.) What is the firm’s current stock price?
(3.) What is the stock's expected value 1 year from now?
(4.) What are the expected dividend yield, the capital gains yield, and the total return during the first year?
c. Now assume that the stock is currently selling at $43.75. What is the expected rate of return on the stock? (
f. What would the stock price be if its dividends were expected to have zero growth?
g. Now assume that Temp Force is expected to experience supernormal growth of 30 percent for the next 3 years, then to return to its long-run constant growth rate of 5 percent. What is the stock's value under these conditions? What is its expected dividend yield and capital gains yield in Year 1? In Year 4? (
h. Is the stock price based more on long-term or short-term expectations? Answer this by finding the percentage of Temp Force current stock price based on dividends expected more than 3 years in the future.
i. Suppose Temp Force is expected to experience zero growth during the first 3 years and then to resume its steady-state growth of 5% in the fourth year. What is the stock's value now? What is its expected dividend yield and its capital gains yield in Year 1? In Year 4?
j. Finally, assume that Temp Force’s earnings and dividends are expected to decline by a constant 6 percent per year, that is, g = -5%. Why would anyone be willing to buy such a stock and at what price should it sell? What would be the dividend yield and capital gains yield in each year?
l. Temp Force recently issued preferred stock. It pays an annual dividend of $1.60, and the issue price was $25 per share. What is the expected return to an investor on this preferred stock?
In: Accounting
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In: Accounting
Use the following information to prepare a trial balance and
figure out the missing numbers.
Cash 720,000
Interest revenue 215,000
Bonds payable 485,000
Sales discounts 70,000
Sales returns and allowances 80,000
Equipment 1,470,000
Land 480,000
Accounts payable 490,000
Buildings 1,640,000
Notes payable (to banks) 300,000
Unsecured notes payable (long-term) 1,600,000
Notes receivable 445,700
Administrative and general expenses 220,000
Payroll taxes payable 177,591
Interest expense 175,750
Accumulated depreciation—equipment 292,000
Loss from impairment of plant assets 85,000
Rent payable (short-term) 45,000
Income taxes receivable 97,630
Long-term rental obligations 531,700
Accumulated depreciation- Buildings 270,200
Share capital—ordinary, €1 par value 200,000
Income taxes payable 98,362
Trading securities 70,000
Share capital—preference, €10 par value 150,000
Goodwill 192,420
Prepaid expenses 20,200
Selling expenses 100,000
Retained earnings ?
Purchases and sales transactions during the year were as
follows, the company uses the perpetual inventory system, and it
applies the FIFO cost flow
assumption to account for its inventory:
date purchases date sales
units Unit price units Unit price
1/1/18 30000 30.00 4/1/18 30000 35.00
3/4/18 15000 30.08 9/4/18 15000 36.00
6/5/18 7000 30.40 23/5/2018 3000 37.00
7/6/18 3500 30.50 4/6/18 1400 39.00
21/8/18 8000 30.80 23/11/18 10600 40.00
19/11/18 5000 30.90
all seal and purchase were in cash
if the account receivable in the beginning of the year had a balance 950000 allowance doubtful account had a credit balance 15000, management estimate that 9% of receivable will be uncollectable during the year. management wrote of 75000
Prepare the trial balance of the provided company after figuring out the missing number
In: Accounting
You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows:
| Lydex Company Comparative Balance Sheet |
||||
| This Year | Last Year | |||
| Assets | ||||
| Current assets: | ||||
| Cash | $ | 880,000 | $ | 1,120,000 |
| Marketable securities | 0 | 300,000 | ||
| Accounts receivable, net | 2,380,000 | 1,480,000 | ||
| Inventory | 3,520,000 | 2,200,000 | ||
| Prepaid expenses | 240,000 | 180,000 | ||
| Total current assets | 7,020,000 | 5,280,000 | ||
| Plant and equipment, net | 9,360,000 | 8,970,000 | ||
| Total assets | $ | 16,380,000 | $ | 14,250,000 |
| Liabilities and Stockholders' Equity | ||||
| Liabilities: | ||||
| Current liabilities | $ | 3,930,000 | $ | 2,820,000 |
| Note payable, 10% | 3,620,000 | 3,020,000 | ||
| Total liabilities | 7,550,000 | 5,840,000 | ||
| Stockholders' equity: | ||||
| Common stock, $75 par value | 7,500,000 | 7,500,000 | ||
| Retained earnings | 1,330,000 | 910,000 | ||
| Total stockholders' equity | 8,830,000 | 8,410,000 | ||
| Total liabilities and stockholders' equity | $ | 16,380,000 | $ | 14,250,000 |
| Lydex Company Comparative Income Statement and Reconciliation |
||||
| This Year | Last Year | |||
| Sales (all on account) | $ | 15,780,000 | $ | 12,780,000 |
| Cost of goods sold | 12,624,000 | 9,585,000 | ||
| Gross margin | 3,156,000 | 3,195,000 | ||
| Selling and administrative expenses | 1,794,000 | 1,572,000 | ||
| Net operating income | 1,362,000 | 1,623,000 | ||
| Interest expense | 362,000 | 302,000 | ||
| Net income before taxes | 1,000,000 | 1,321,000 | ||
| Income taxes (30%) | 300,000 | 396,300 | ||
| Net income | 700,000 | 924,700 | ||
| Common dividends | 280,000 | 462,350 | ||
| Net income retained | 420,000 | 462,350 | ||
| Beginning retained earnings | 910,000 | 447,650 | ||
| Ending retained earnings | $ | 1,330,000 | $ | 910,000 |
To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company’s industry:
| Current ratio | 2.3 | |
| Acid-test ratio | 1.0 | |
| Average collection period | 30 | days |
| Average sale period | 60 | days |
| Return on assets | 8.4 | % |
| Debt-to-equity ratio | 0.7 | |
| Times interest earned ratio | 5.7 | |
| Price-earnings ratio | 10 | |
rev: 04_27_2020_QC_CS-209476
Problem 14-15 Part 1
Required:
1. You decide first to assess the company’s performance in terms of debt management and profitability. Compute the following for both this year and last year: (Round your "Percentage" answers to 1 decimal place and other answers to 2 decimal places.)
a. The times interest earned ratio.
b. The debt-to-equity ratio.
c. The gross margin percentage.
d. The return on total assets. (Total assets at the beginning of last year were $12,990,000.)
e. The return on equity. (Stockholders’ equity at the beginning of last year totaled $7,947,650. There has been no change in common stock over the last two years.)
f. Is the company’s financial leverage positive or negative?
2. You decide next to assess the company’s stock market performance. Assume that Lydex’s stock price at the end of this year is $78 per share and that at the end of last year it was $46. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.)
a. The earnings per share.
b. The dividend yield ratio.
c. The dividend payout ratio.
d. The price-earnings ratio.
e. The book value per share of common stock.
3. You decide, finally, to assess the company’s liquidity and asset management. For both this year and last year, compute:
a. Working capital.
b. The current ratio. (Round your final answers to 2 decimal places.)
c. The acid-test ratio. (Round your final answers to 2 decimal places.)
d. The average collection period. (The accounts receivable at the beginning of last year totaled $1,590,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.)
e. The average sale period. (The inventory at the beginning of last year totaled $1,950,000.) (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal place.)
f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place.)
g. The total asset turnover. (The total assets at the beginning of last year totaled $12,990,000.) (Round your final answers to 2 decimal places.)
In: Accounting
On January 1, Year 1, Camdenton Corporation issues $100,000 of 5% bonds maturing in 10 years when the market rate of interest is 4%. Interest is paid semiannually on June 30 and December 31. When using the PV function in Excel to compute the issue price of the bonds, the applicable interest payment (“PMT”) is:
a. 2500
b. 4000
c. 5000
In: Accounting
Questions
1. What are the 3 problems that might arise from the application of
ABC costing?
2. Describe and explain the evolution of a management control
system, including how
budgets became a major feature of that system.
3. What is an accounting tool and why is budgeting described as an
accounting tool?
4. Define kaizen budgeting and its importance for cost
management. How would you
incorporate kaizen budgeting in your organization? Give
example.
In: Accounting
Examine the statement of cash flows for Amazon. Where is Amazon generating its cash? What investments did Amazon make over the past fiscal year? Did Amazon have financing activities? How would you describe the overall cash position of your company? Again, use the notes to the financial statements (not ratio analysis) to support your findings.
In: Accounting
What is included in the equity portion of the debt to equity ratio? Is anything eliminated?
In: Accounting
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In: Accounting
In an effort to increase the number of shoppers coming into its stores and the length of time those shoppers stay, Kohl’s (KSS (Links to an external site.)) is adding a small café (Kohl’s Café) to each of two of its department stores in the Milwaukee, Wisconsin area. Each café will sell Caribou Coffee items including lattes, cappuccinos, and other coffee items. Granola bars, chips, cookies, and other grab-and-go snacks will also be available. These cafés are experimental at this point; Kohl’s has no plans to add the cafés to other stores.
Questions
In: Accounting
Using the following information prepare all appropriate journal entries for years 1 and 2.
You are only required to create entries within the subaccount of “Education and training” you do not have to make any entries for corresponding accounts in other funds.
County regulations require all appropriations lapse at year end.
Year 1:
Year 2:
Please do not “combine” ANY entries unless absolutely required.
( this will require 16 entries if done correctly.)
In: Accounting
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In: Accounting
Compute, Disaggregate, and Interpret ROE and
RNOA
Headquartered in Calgary, Alberta, Husky Energy Inc. is a publicly
traded, integrated energy company. Selected fiscal year balance
sheet and income statement information for Husky Energy follow
(Canadian $ millions).
| C$ millions | 2018 | 2017 |
|---|---|---|
| Revenues, net | $40,054 | |
| Net income attributable to Husky | 2,623 | |
| Pretax NNE | 425 | |
| Operating assets | 58,016 | $54,400 |
| Operating liabilities | 17,755 | 17,136 |
| Equity attributable to Husky shareholders | 35,284 | 32,321 |
| Tax rate | 20.00% |
a. Compute the 2018 return on equity (ROE) and the 2018
return on net operating assets (RNOA).
Note: Round percentages to two decimal places (for
example, enter 6.66% for 6.6555%).
2018 Return on equity: Answer%
2018 Return on net operating assets: Answer%
b. Disaggregate RNOA into net operating profit margin
(NOPM) and net operating asset turnover (NOAT).
Note: For NOPM and RNOA, round percentages to two
decimal places (for example, enter 6.66% for 6.6555%).
Note: For NOAT, round amount to three decimal
places (for example, enter 6.776 for 6.77555).
| NOPM | x | NOAT | = | RNOA |
| Answer | x | Answer | = | Answer |
c. Compute the percentage of RNOA to ROE, and compute
Husky’s nonoperating return for 2018.
Note: Round percentages to two decimal places (for
example, enter 6.66% for 6.6555%).
Percentage of RNOA to ROE: Answer%
Nonoperating return: Answer%
In: Accounting
Eye Trendy Corporation is a distributor of frames for sunglasses. The company’s controller is currently preparing a budget for the third quarter of the year. The following information is from company’s financial records: Projected Sales July 3,120 units August 2,000 units September 2,640 units October 3,000 units • Selling price is RM25 per unit • Collections from customers are normally 70 per cent in the month of sale, 20 per cent in the month following sale, and 9 per cent in the second month following the sale. The balance is expected to be uncollectible. Projected Purchases • Purchase price is RM18 per unit. • All frames purchases are on account. 70 per cent of the frames purchased are paid for in the month of purchase; the remaining 30 per cent are paid for in the month after acquisition. • Inventory of frames on 1st July is 1,200 units. The frames inventory at the end of each month equals 20 per cent of sales anticipated for the following month. • The company purchases the frames as needed in multiple quantities of 1,000 units per shipment. Operating Expenses • General and administrative expenses are projected to be RM33,000 for the quarter. The breakdown of these expenses is presented in the following schedule. All cash expenditures will be paid uniformly throughout the quarter: Promotion RM9,000 Insurance RM12,000 Utilities RM7,500 Depreciation RM4,500 Total RM33,000 Other information • Cash proceeds from sale of old equipment amounted to RM5,000 in the month of August. • Purchase of new equipment amounted to RM50,000 is to be made in the month of September. • Eye Trendy is expected to maintain a minimum cash balance of RM20,000 at all times. If the cash balance is less than RM20,000 at the end of each month, the company borrows amounts necessary to maintain this balance. All amounts are repaid out of the subsequent positive cash flow. • The company’s cash balance on 1st July is RM22,000. Required: a. Prepare the following schedules: (i) Expected cash collections for the sales of frames during the third quarter. Show computations by month and in total for the quarter. (ii) Expected Cash disbursements for the purchases of frames during the third quarter. Show computations by month and in total for the quarter. (iii) Expected Cash balance on 30th September. Show computations by month and in total for the quarter. b. Refer to your answer in requirement (a). Prepare a schedule that shows whether or not the company meets the minimum cash requirement and compute the amount of borrowing required, if any, to maintain the firm’s minimum cash balance. c. How can a company’s board of directors use the different types of budget to influence the future direction of the firm? You only answer point a.Please answer point b and c.
The answer for A is too long to be update here.You can check in search.
In: Accounting
Below is the assignment that I need to do and having a hard time finding the correct ratios like Gross Margin, EBITD, Price to cash flow etc.. from SEC EDGAR. I am comparing CVS Health and Walgreens 2018. Below is the question similar to mine that I found on the website. I am trying to figure out where can I find those ratios?
MBA 520 Module Two Activity Guidelines and Rubric
Overview: For this task, you will analyze the financial health of
two competitors in the same industry based on their ratios, using
the provided Excel spreadsheet template. Then, you will complete
your analysis by writing a short synopsis of your findings in the
space below the analysis.
Prompt: Follow the steps below to analyze the financial health of
two competitors. Use the Module Two Activity Template to complete
this task.
Select two companies operating in the same industry (for example,
Macy’s and Dillard’s). The companies have to be in the same
business for the ratios to be valuable to your analysis. Then,
complete the template, providing the following:
? Ratio Research: Use the template to analyze the selected ratios
(profitability, financial strength, valuation, management
effectiveness, dividends, and efficiency) for both of the
competitors. To complete this part, you can reference the
Morningstar website in the Module Two resources to obtain the
ratios. You can also use the SEC EDGAR Company Filings resource
from Module One to obtain the ratio from annual reports. Please
note: The ratios have to be from the same time period (the same
year for both competitors). For training on how to use Excel, visit
the Hoonuit training site or search YouTube to find appropriate
Excel training videos.
? Industry Ratios: To analyze ratios for the companies, you also
need to obtain the ratios for the industry that the competitors
operate in. Industry values for the ratios can be found in the
index column. If no index value is available, put the five-year
averages for both companies in the industry column and use these
figures for the industry comparison of your ratio analysis.
? Ratio Analysis: Compare the two companies based on their ratios.
Use the last column in the template to write in detail how each
company is doing based on the ratios. Compare the company ratios to
the industry and each other.
? Summary: This short write-up should be done directly in your
Excel spreadsheet.
o What is a ratio analysis? Briefly explain in about one paragraph.
Please quote your resource.
o Referring to the ratio analysis, in which company would you be
willing to invest and why?
Note: This is a theoretical exercise. You should not be investing
according to this analysis.
| RATIOS | RETAIL | WALMART | TARGET | ANALYSIS |
| Profitability Ratios (%) | ||||
| Gross Margin | 25.37 | 25.82 | ||
| EBITD Margin | 9.31 | 8.19 | ||
| Operating Margin | 3.28 | 5.16 | ||
| Pretax Margin | 2.18 | 5.07 | ||
| Effective Tax Rate | 20.28 | 22.65 | ||
| Financial Strength | ||||
| Quick Ratio | 0.2 | 0.3 | ||
| Current Ratio | 0.76 | 0.95 | ||
| LT Debt to Equity | 0.46 | 96.65 | ||
| Total Debt to Equity | 0.58 | 98.96 | ||
| Interest Coverage | 12.35 | |||
| Valuation Ratios | ||||
| P/E Ratio | 26.94 | 14.71 | ||
| Price to Sales (P/S) | 0.52 | 0.6 | ||
| Price to Book (P/B) | 3.25 | 3.89 | ||
| Price to Tangible Book | 4.19 | 3.89 | ||
| Price to Cash Flow | 11.32 | |||
| Price to Free Cash Flow | 9.26 | 7.07 | ||
| Management Effectiveness (%) | 4.82 | 7.62 | ||
| Return On Assets | 8.41 | 11.81 | ||
| Return On Investment | 12.66 | 26.35 | ||
| Return On Equity | ||||
| Dividends | ||||
| Dividend Yield | 2.5 | 3.09 | ||
| Payout Ratio | 46.62 | |||
| Efficiency | ||||
| Revenue/Employee | 227,429 | 208,345 | ||
| Net Income/Employee | 4,783 | 8,487 | ||
| Receivable Turnover | 90.45 | 85.67 | ||
| Inventory Turnover | 8.26 | 5.71 |
| Asset Turnover | 2.46 | 1.88 |
Summary
Referring to your ratio analysis above, in which company would you be willing to invest, and why?
In: Accounting