Compute and Interpret Z-score

Balance sheets and income statements for Lockheed Martin Corporation follow. Refer to these financial statements to answer the requirements.

As of December 31, there were the approximate shares outstanding:
2005 - 434,264,432
2004 - 440,445,630

As of December 31, the company's stock closed at the following values:
2005 - $63.63
2004 - $55.55

(a) Compute and compare the Altman Z-scores for both years. (Do not round until your final answer; then round your answers to two decimal places.)
2005 z-score = Answer

2004 z-score = Answer

This is a tableau question.

I. (a) Determine the trend line using both linear and two nonlinear equations Hint: You can choose any two of the nonlinear options in edit trend lines within Tableau. (b) Write down the equations (coefficients). Hint: Double click on trend line and click on describe the model.

II. Which trend line would you suggest? Why?

III. Estimate the sales for 2022. Does this seem like a reasonable estimate based on historical data? (Hint: Show Me — first icon on the left hand side)

IV. Check the quality of the forecast prepared by Tableau. Also, Provide Mean Absolute Error (MAE), and the Mean Absolute Percentage Error (MAPE). Hint: one click on forecast area with the right button of your mouse, then describe forecast and check first Summary and later Models.

V. Prepare a dashboard with 4 sheets: Sheet 1 for the trend line using linear function, Sheet 2 for the trend line using one of the nonlinear function of your choice, Sheet 3 for the trend line using another nonlinear function of your preference and Sheet 4 for Forecasting.

Balance Sheet as at year end 31^st Dec

You are required to carry out the following analyses;

Common size balance sheet for the five years. and interpret. (5 marks

The Mars Reconnaissance Orbiter (launched on 8/12/2005) achieved a nearly circular orbit in September 2006 with a period of T = 6.72 x 10³ s. The mass, M, of Mars is 6.417 x 10²³ kg and its radius, R_Mars, is 3.39 x 10⁶ m.

The mass, m, of the Orbiter is 1,031 kg.

1) The Net Radial Force, ΣF_r, acting on the Orbiter as it orbits Mars, is due to the gravitational force between it and Mars. ΣF_r = GMm/r², where r is the orbital radius.

True or False

2) This Net Radial Force, ΣF_r, is also equal to mv²/r = m(2π/T)²r.

True or False

3) Accordingly, r = [GM(T/2π)²]^1/3

True or False

4) The speed, v, and the radius, r, of the Orbiter depend on the Orbiter's mass.

True or False

5) The Orbiter is _____x 10⁶ m from the center of Mars. Show your answer with the correct number of significant figures.

True or False

6) How many times does the Orbiter circle Mars in one earth day? (Show three significant figures in your answer. Don't try to use exponential notation. Use numbers like 3.76 or 15.9)

7) The value of g, gravitational acceleration, near the surface of Mars is ______ m/s².

8) An engineer is planning to put another satellite around Mars with a radius of r = 4.000 x 10⁷ m. Its speed in m/s would be:

9) What is the period, T, of the above planned satellite in earth days (to 2 significant figures)?

The S & P 500 is a collection of 500 stocks of publicly traded companies. Using data obtained from Yahoo!Finance, the monthly rates of return of the S & P 500 from 1950 through 2015 are normally distributed. The mean rate of return is 0.007443 and the standard deviation is 0.04135.  

What is the probability that a randomly selected month has a positive rate of return? That is, what is P(X > 0)?

What is the probability that the mean monthly return for a one year period is positive? That is, for n = 12 months, what is P(the sample mean (x-bar) > 0)??

What is the probability that the mean monthly return for a three year period is positive? That is, for n = 36 months, what is P(the sample mean (x-bar) > 0)?

The Connecticut Mastery Test is administered to 6^th graders throughout the state. The Superintendent of Schools in Wolcott decided to acknowledge those students whose scores fell in the top 15% of test scores for their local school system. These students will receive an Award for High Achievement. If scores for 6^th graders in Wolcott are normally distributed with µ = 270 and σ = 24, what is the minimum score a student would need to earn an award?

Financial ratios are essential to provide an accurate valuation of a firm. Select a publicly traded firm of your choice. You may use the firm you have elected to profile for the course-long Financial Analysis and Proposal assignment or a completely different organization altogether. Select one ratio each in the areas of (a) performance, (b) activity, (c) financing, and (d) liquidity warnings. Provide an evaluation of the selected firm's strengths and weaknesses. Based on the ratios you selected, how well does your chosen firm perform? Explain.

You are trying to calculate the WACC for two firms. Firm XiG is publicly traded and firm TanW is a private firm. You have collected all necessary information for your WACC calculation:

In terms of liabilities, XiG has account payables of $400Million and a bank loan of $200Million. XiG also has cash holding of $300Million. XiG is current trading at $520/share with 1 Million shares outstanding. XiG’s returns move one to one with the stock market returns.

XiG’s average tax rate is 30% and marginal tax rate of 35%. XiG is rated as Aa1 by Moody’s and similar Aa1 rating firms have cost of debt of 2%. Risk free rate is 1%, market risk premium is 5%.

TanW is in the same industry as XiG. After consulting with an industry expert, you are confident that TanW and XiG have roughly the same business risk. Currently, TanW has net debt to equity ratio of 2. TanW’s average tax rate is 30% and marginal tax rate of 35%. Its cost of debt is 3%.

Now you proceed to calculate the WACC and Asset Beta for both firms ?

Financial ratios are essential to provide an accurate valuation of a firm. Select a publicly traded firm of your choice. Select one ratio each in the areas of (a) performance, (b) activity, (c) financing, and (d) liquidity warnings. Provide an evaluation of the selected firm's strengths and weaknesses. Based on the ratios you selected, how well does your chosen firm perform? Explain.

I would like to learn about Verizon Wireless

a) You are the manager of a publicly traded corporation. Many of your firm's investors wish to live for today and thus discount the future quite heavily. What projects should you invest in to keep these investors happy?

            b) When the Coca-Cola Corporation was considering whether to sell Coke II, should they have taken into consideration the projected lost sales in Coke Classic?

            c) Why use an asset beta rather than standard deviation to measure risk?

Clara Corp. is a publicly traded entity. On January 1, 20X3, it is trying to decide whether
to grant equity-settled stock options or cash-settled share appreciation rights (SARs) to
its employees. Its bank loan has a debt-to-asset covenant that must be maintained and
the board of directors is concerned about the impact these compensation plans will
have on this covenant. The directors are considering two alternatives as described
below:

1. Grant 20,000 equity-settled stock options to its management team. Relevant
information is as follows:
• The exercise price is $45 per share, which is the same as the share price on the
date the options are granted.
• The options vest three years after the grant date and expire on December 31,
20X9. Any employee that leaves during the vesting period forfeits their options.
• The fair value of the options on the date of the grant is $2.60 per option.
The company expects that 10% of the options will be forfeited throughout the vesting
period. The fair value of the options at December 31, 20X3, is expected to be $2.90
each.

2. Grant 20,000 cash-settled SARs to its management team. The benchmark price will
be $45. The SARs must be exercised by December 31, 20X5. The same forfeiture
rates are expected as for the stock options. The fair value of each SAR at
December 31, 20X3, is expected to be $11.00.
At December 31, 20X3, the company’s year end, Clara is expected to have total debt
and asset balances of $160,000 and $300,000, respectively.

Required:
a) Prepare the journal entries for 20X3 for the stock option alternative. Calculate the
forecasted debt-to-asset ratio under this alternative.

b) Prepare the journal entries for 20X3 for the SARs alternative. Calculate the
forecasted debt-to-asset ratio under this alternative.

c) Recommend whether Clara should issue stock options or SARs to its management
team. (1 mark)