Bfn101 Financial Management

1. Using the historical data as a guide, construct a pro forma (forecasted) profit and loss statement

Financial ratio analysis is a valuable tool that allows one to assess the success, potential failure or future prospects of the company (Bazley 2012). The ratios are helpful in spotting useful trends that can indicate the warning signs of

Profitability ratio Earnings Per Share Book Value per Share Profit margin on sales Return on assets Return on shareholders’ equity Return on Investment: DuPont Model (ROI) Liquidity Ratio Current ratio Quick ratio (acid test) Working Capital 2009 2008 2007

13. Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Eddy Auto Supplies Balance Sheet December 31, 2014 Cash $84,000 Accounts payable $110,000 Accounts receivable $80,000 Salaries and wages payable $20,000 Inventory $140,000 Mortgage payable $180,000 Prepaid insurance $60,000 Total liabilities $310,000 Stock investments $170,000 Land $190,000 Buildings $226,000 Common stock $240,000 Less: Accumulated Retained earnings $500,000 depreciation ($40,000) $186,000 Total

2. For the most recent year, what is the amount of inventory in the balance sheet? What does this amount represent?

Referenceshttp://www.jnj.com/home.htmBenchmarking your business with financial ratio analysis. Retrieved October 14, 2007 fromhttp://www.contractingbusiness.com/25/Issue/Article/False/46149/IssueBrealey, R., Myers, S. & Marcus, A. (2003). Fundamentals of Corporate Finance

During 2012 sales on account were $145,000 and collections on account were $86,000. Also, during 2012 the company wrote off $8,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $54,000. The change in the cash realizable value from the balance at 12/31/11 to 12/31/12 was (Points : 2)

Ratio analysis shows the correlation within certain figures of financial statements, like current assets and current liability, and is used for three types of company needs- within, intra- and inter-company. Association can be shown in proportion, rate, or percentage and can evaluate company’s liquidity, profitability, and solvency. Liquidity ratios show company’s ability to pay obligations and fulfill needs for cash; profitability ratios show wellbeing and success for the certain time period; and solvency ratios show company’s endurance over the years.

In Part A, I will examine liquidity and coverage ratios, assessing each company’s ability to meet its debt obligations in both the short and long term, to pay dividends, and to cover its expected operating expenses. Next, in Part B, I will inspect profitability ratios, assessing the ability of each enterprise to provide its investors with a return on their

Profit available less Dividends Retained profits Capital Owners' equity Loan from Carter Other liabilities Accum depreciation

Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item.

The analysis will be base on the most important ratios as, Liquidity, Profitability, and Solvency Ratios.

A-Department stores- would fit this financial data because their long-term debt stands outs it shows that this department store must borrow a lot of money to finance their inventories and buildings. They have an average inventory turnover rate which means that they currently efficient. This firm overall is at a good pace and its generates a lot of asset. Its shows little signs of any deffieciency except for the many long term debts- and account payable.

Covenant’s balance sheet and income statement is a comparison of the years 2010, 2009, and 2008, and shows the company as struggling due to the current economy situation. The company’s total current assets decreased by 10.50% and include cash, short-term investment as well as inventory. The company had an increase of 9.23% in their total liabilities that was due to increases in their long-term debt as well as other liabilities. The net tangible assets for Covenant showed an increase of 7.24% over the twelve-month period. The income statement showed a decrease of 8.9% in the company’s gross profit during 2011. It also showed

In such a setting then, a question is being posed relative to the actual objective of the accounting and finance managers. Paramasivan and Subramanian (2009) argue that there are numerous objectives of financial management, which can nevertheless be classified into two categories: