1)
Intro
Use the following information to answer the questions:
| Assets | Liabilities and Equity | |||
| Cash | 12,000 | Accounts payable | 12,000 | |
| Marketable securities | 0 | Notes payable | 8,000 | |
| Accounts receivable | 19,000 | Current liabilities | 20,000 | |
| Inventory | 39,000 | Long-term debt | 95,000 | |
| Current assets | 70,000 | Total liabilities | 115,000 | |
| Machines | 56,000 | Paid-in capital | 20,000 | |
| Real estate | 34,000 | Retained earnings | 25,000 | |
| Fixed assets | 90,000 | Equity | 45,000 | |
| Total assets | 160,000 | Total liab. & equity | 160,00 | |
QUESTIONS
– What is the current ratio?
Intro
2)
Use the following information to answer the questions:
| Assets | Liabilities and Equity | |||
| Cash | 14,000 | Accounts payable | 19,000 | |
| Marketable securities | 2,000 | Notes payable | 6,000 | |
| Accounts receivable | 7,000 | Current liabilities | 25,000 | |
| Inventory | 35,000 | Long-term debt | 95,000 | |
| Current assets | 58,000 | Total liabilities | 120,000 | |
| Machines | 34,000 | Paid-in capital | 20,000 | |
| Real estate | 80,000 | Retained earnings | 32,000 | |
| Net fixed assets | 114,000 | Equity | 52,000 | |
| Total assets | 172,000 | Total liab. & equity | 172,000 | |
| Line item | Value |
| Sales | 75,000 |
| – Costs | 61,500 |
| – Depreciation | 2,000 |
| = EBIT | 11,500 |
| – Interest | 800 |
| = Taxable income | 10,700 |
| – Taxes | 3,531 |
| = Net income | 7,169 |
– What is the total debt ratio (including all liabilities)?
Intro
3)
Sales for the year were $168,000.
The balance sheet at the end of the year is given below:
| Assets | Liabilities and Equity | |||
| Cash | 11,000 | Accounts payable | 17,000 | |
| Marketable securities | 2,000 | Notes payable | 6,000 | |
| Accounts receivable | 7,000 | Current liabilities | 23,000 | |
| Inventory | 33,000 | Long-term debt | 95,000 | |
| Current assets | 53,000 | Total liabilities | 118,000 | |
| Machines | 34,000 | Paid-in capital | 20,000 | |
| Real estate | 80,000 | Retained earnings | 29,000 | |
| Net fixed assets | 114,000 | Equity | 49,000 | |
| Total assets | 167,000 | Total liab. & equity | 167,000 | |
– What is the fixed asset turnover ratio?
Intro
4)
Use the following information to answer the questions:
| Assets | Liabilities and Equity | |||
| Cash | 9,000 | Accounts payable | 17,000 | |
| Marketable securities | 2,000 | Notes payable | 6,000 | |
| Accounts receivable | 4,000 | Current liabilities | 23,000 | |
| Inventory | 42,000 | Long-term debt | 95,000 | |
| Current assets | 57,000 | Total liabilities | 118,000 | |
| Machines | 34,000 | Paid-in capital | 20,000 | |
| Real estate | 80,000 | Retained earnings | 33,000 | |
| Fixed assets | 114,000 | Equity | 53,000 | |
| Total assets | 171,000 | Total liab. & equity | 171,000 | |
| Line item | Value |
| Sales | 74,000 |
| – Operating expenses | 60,680 |
| – Depreciation | 2,000 |
| = EBIT | 11,320 |
| – Interest | 800 |
| = Taxable income | 10,520 |
| – Taxes | 3,472 |
| = Net income | 7,048 |
– What is the profit margin (aka net profit margin)?
Intro
5)
Use the following information to answer the questions:
| Assets | Liabilities and Equity | |||
| Cash | 12,000 | Accounts payable | 19,000 | |
| Marketable securities | 4,000 | Notes payable | 8,000 | |
| Accounts receivable | 11,000 | Current liabilities | 27,000 | |
| Inventory | 39,000 | Long-term debt | 80,000 | |
| Current assets | 66,000 | Total liabilities | 107,000 | |
| Machines | 42,000 | Paid-in capital | 30,000 | |
| Real estate | 60,000 | Retained earnings | 31,000 | |
| Net fixed assets | 102,000 | Equity | 61,000 | |
| Total assets | 168,000 | Total liab. & equity | 168,000 | |
| Line item | Value |
| Sales | 690,000 |
| Operating expenses | 565,800 |
| Depreciation | 25,000 |
| EBIT | 99,200 |
| Interest | 8,000 |
| Taxable income | 91,200 |
| Taxes | 30,096 |
| Net income | 61,104 |
The company has 30,000 shares of common stock outstanding, each currently trading at $20.9.
– What are earnings per share?
Intro
6)
Samsung has sales of $44,000 and a net income of $20,000. Total assets are $43,000 and total equity is $33,000.
The consumer electronics industry as a whole has the following characteristics:
| Ratio | Value |
| Profit margin | 0.137 |
| Total asset turnover | 0.941 |
| Equity multiplier | 1.8 |
| Return on equity | 0.232 |
– What is Samsung’s profit margin?
Intro
7)
A company has sales of $39,000 and total costs of $29,000, including depreciation and interest expenses. The average tax rate is 50%.
Total assets are $74,000 and total equity is $40,000.
– What is the company’s net income?
Intro
8)
Use the following information to answer the questions:
| Assets | Liabilities and Equity | |||
| Cash | 13,000 | Accounts payable | 21,000 | |
| Marketable securities | 4,000 | Notes payable | 8,000 | |
| Accounts receivable | 9,000 | Current liabilities | 29,000 | |
| Inventory | 26,000 | Long-term debt | 80,000 | |
| Current assets | 52,000 | Total liabilities | 109,000 | |
| Machines | 42,000 | Paid-in capital | 30,000 | |
| Real estate | 60,000 | Retained earnings | 15,000 | |
| Net fixed assets | 102,000 | Equity | 45,000 | |
| Total assets | 154,000 | Total liab. & equity | 154,000 | |
| Income statement | |
| Sales | 430,000 |
| Operating expenses | 387,000 |
| Depreciation | 25,000 |
| EBIT | 18,000 |
| Interest | 5,000 |
| Taxable income | 13,000 |
| Taxes | 4,290 |
| Net income | 8,710 |
There are 9,000 shares outstanding, each currently trading for $8.22.
QUESTIONS
– What is total asset turnover?
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