A company's current ratio is 2:1. What effect will issuing $100,000 of common stock for cash have on this company's current ratio? O A. Increases it. O B. Decreases it. O C. Have no effect.
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- Common stock transactions on the statement of cash flows Jones Industries received 800,000 from issuing shares of its common stock and 700,000 from issuing bonds. During the year, Jones Industries also paid dividends of 90,000. How are the effects of these transactions reported on the statement of cash flows?Common stock transactions on the statement of cash flows Jones Industries received 600,000 from issuing shares of its common stock and 400,000 from issuing bonds. During the year, Jones Industries also paid dividends of 60,000. How are the effects of these transactions reported on the statement of cash flows?Current position analysis The following items are reported on a company's balance sheet: Cash 210,000 Marketable securities 120,000 Accounts receivable (net) 110,000 Inventory 160,000 Accounts payable 200,000 Determine (A) the current ratio and (U) the quick ratio. (Round lo one decimal place.)
- Transaction: Martin Company issued $45,000 of capital stock for cash. Which two accounts are affected? What kind of accounts are they? Do the account balances increase or decrease? Increase Decrease Increase Decrease Do we debit or credit the accounts? Debit Credit Debitsources and Uses of Cash. How would each ofthe following events would affect the firm's balancesheet. State whether each change is a source or useof cash. (LO3)d.The firm repurchases its own common stock.e.The firm pays its quarterly dividend.f. The firm issues $1 million of long-term debt anduses the proceeds to repay a short-term bank loan.If a company issues 1 million R1 shares at R1.30 per share, what will be the effect on the statement of cash flows? Select one: a. Cash flows from financing activities will increase by R1.3 million. b. Cash flows from investing activities will increase by R1.3 million. c. Cash flows from investing activities will increase by R1.0 million. d. Cash flows from financing activities will increase by R1.0 million.
- Use the financial ratios of company A and company B to answer the questions below. Company A Company B Yr t+1 Year t Yr t+1 Year t Current ratio 0.55 0.59 0.56 0.55 Accounts receivable turnover 6.22 6.25 5.06 4.87 Debt to total assets 40.5% 40% 67.8% 65.9% Times interest earned 8.80 30.6 5.97 6.33 Free cash flows (in millions) ($3,819) $3,173 $168 $550 Return on stockholders’equity 7.7% 7.7% 26.6% 23.3% Return on assets 4.3% 4.3% 8.9% 7.9% Profit margin…1. Which can qualify as cash equivalent? a. One-year BSP treasury bill b. Six-month money market placement c. Equity securities d. Preference shares with specified redemption date and acquired three months before redemption date 2. According to PAS 7, which of the following statement is incorrect? * a. Statement of Cash Flows requires an entity to present a statement of cash flows as an integral part of its primary financial statements b. Investing and financing transactions which do not require the use of cash should be excluded from the statement of cash flows, but they should be separately disclosed elsewhere in the financial statements c. Cash flows under operating activities are classified and presented either using the 'direct' or 'indirect' method d. None. All of the above statements are correct 3. The aggregate cash flows arising from obtaining or losing control of subsidiaries or other…9. Which of the following shall not be classified as cash equivalent?a. Equity securities bought three months before year endb. Three months treasury billsc. 90 days money market instrumentd. Three year treasury bills bought 60 days before its maturity 10. Which of the following should be presented as part of investing activities of statement of cash flow?a. Issuance of bonds in exchange of equipmentb. Cash payment for securities held for tradingc. Cash receipts from sale of equipmentd. Cash receipts from sale of trading securities 11. Financing activities involves transactions related toa. Current assets used to pay current obligationb. Transactions between shareholders’ and entityc. Short term liabilities used to finance the company’s operationd. Assets used in production of entity’s product 12. Which of the following statements are true?I. Investing activities are presented using direct method in the statement of cash flows.II. Financing activities are presented using direct method…
- d) A company has current assets of $560,000 and current liabilities of $233,000. The board of directors declares a cash dividend of $169,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend? (Round answers to 2 decimal places, e.g. 2.50.) Current ratio after the declaration but before payment enter the ratio rounded to 2 decimal places :1 Current ratio after the payment of the dividend enter the ratio rounded to 2 decimal places :1The company A manages cash by using Baumol model for defining the amount of cash. According to the Baumol model the average model the average balance (C */2) is equal to 500$. That moment the negotiable securities yield was 4%. A steep rise caused an increase in interest rates to 9%. Which is the new average cash balance?Ay 3. What is the free cash flow for this company: Net Income = $500mm Equity comp = $500mm Depreciation = $1BN Average cost of debt funding = 10% Average book value of debt = $45BN Tax expense = $100mm Increase in accounts payable = $500mm Increase in inventory = $1BN Decrease in accounts receivable = $1BN Net unrealized gain $1BN This company is a bank and accounting rules require it to include certain unrealized gains and losses in net income
