1. Balance
Sheet Analysis
Complete the balance sheet and sales information in the table that follows for
Hoffmeister Industries using the following financial data:
Debt
ratio: 55%
Quick ratio: 0.95
Total assets turnover: 2.8
Days sales outstanding: 31 days*
Gross profit margin on sales: (Sales – Cost of goods sold)/Sales = 26%
Inventory turnover ratio: 5.0
* Calculation is based on a 365-day year.
Round your answers to the nearest whole dollar.
Balance
Sheet
|
Cash
|
$
|
Accounts
|
$
|
|
Accounts
|
$
|
Long-term
|
$ 60,000
|
|
Inventories
|
$
|
Common stock
|
$
|
|
Fixed assets
|
$
|
Retained
|
$ 97,500
|
|
Total assets
|
$ 300,000
|
Total
|
$
|
|
Sales
|
$
|
Cost of goods
|
$
|
2. Corporate
After-Tax Yield
The Shrieves Corporation has $10,000 that it plans to invest in marketable
securities. It is choosing among AT&T bonds, which yield 8.5%, state of
Florida muni bonds, which yield 4% (but are not taxable), and AT&T
preferred stock, with a dividend yield of 7%. Shrieves’s corporate tax rate is
35%, and 70% of the dividends received are tax exempt. Find the after-tax rates
of return on all three securities. Round your answers to two decimal places.
|
A-T rate of
|
%
|
|
A-T rate of
|
%
|
|
A-T rate of
|
%
|
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