Lloyd Inc. has sales of $150,000, a net income of $16,500, and the following balance sheet:CashReceivablesInventoriesTotal current assetsNet fixed assetsTotal assetsThe new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5x, without affecting sales or netincome. If inventories are sold and not replaced (thus reducing the current ratio to 2.5x), if the funds generated are used to reduce common equity (stock can be repurchased atbook value), and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places.percentage points.s new quick ratio? Do not round intermediate calculations. Round your answer to two decimal places.ROE wil ✔ -Select- yincreasedecreaseWhat w$ 19,125 Accounts payable70,500 Notes payable to bank180,000 Total current liabilities$269,625 Long-term debt105,375 Common equity$375,000 Total liabilities and equity$ 31,50018,750$ 50,25073,875250,875$375,000

We have undertake a transaction bring the current ratio to the target level. This will result into…

Answered: Lloyd Inc. has sales of $150,000, a net…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter6: Statement Of Cash Flows

Section: Chapter Questions

Problem 10Q

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Southwestern Wear Inc. has the following balance sheet: The trustees costs total 281,250, and the firm has no accrued taxes or wages. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of 2.5 million is received from sale of the assets?
The King Carpet Company has $2,910,000 in cash and a total of $12,780,000 in current assets. The firm's current liabilities equal $5,940,000 such that the firm's current ratio equals 2.2. The company's managers want to reduce the firm's cash holdings down to $1,160,000 by paying $591,000 in cash to expand the firm's truck fleet and using $1,159,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
Weber Interstate Paving Co. had $450 million of sales and $225 million of fixed assets last year, so its FA/Sales ratio was 50%. However, its fixed assets were used at only 70% of capacity. If the company had been able to sell off enough of its fixed assets at book value so that it was operating at full capacity, with sales held constant at $450 million, how much cash (in millions) would it have generated? Select the correct answer. a. $62.85 b. $64.40 c. $65.95 d. $70.60 e. $67.50
Benson, Inc., has sales of $38,530, costs of $12,750, depreciation expense of $2,550, and interest expense of $1,850. The tax rate is 21 percent. What is the operating cash flow, or OCF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Menendez Corporation expects to sell $ 12 million. Costs, excluding depreciationtion, will represent 75% of sales and a depreciation of $ 1.5 million is expected.Sales will be collected in cash and all costs less depreciation will bebe settled during the year. The federal and state tax rate is 40%.to. Prepare an income statement. What will the company's expected net cash flow be?b. Suppose that Congress modified the tax laws and that doubled thecompany pricing. There were no changes in operations. How would it affectThat in recorded earnings and net cash flow?c. Now suppose that Congress did not double depreciation but reduced it byfifty%. How will that affect net cash flow?d. If it were your company, would you prefer Congress to double depreciation spendingtion or cut it in half? Explain your answer.
Groff Incorporated, has sales of $51,500, costs of $23,600, depreciation expense of $2,400, and interest expense of $2,150. If the tax rate is 21 percent, what is the operating cash flow, or OCF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
The King Carpet Company has $3,010,000 in cash and a total of $12,110,000 in current assets. The firm's current liabilities equal $5,630,000 such that the firm's current ratio equals 2.2 The company's managers want to reduce the firm's cash holdings down to $1,180,000 by paying $560,000 in cash to expand the firm's truck fleet and using $1,270,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio? The new current ratio is ? (round 2 decimals)
Graff, Incorporated, has sales of $51,500, costs of $23,600, depreciation expense of $2,400, and interest expense of $2,150. If the tax rate is 21 percent, what is the operating cash flow, or OF? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
Penketh Ltd has operating profit for the year ended 30 June 2021 of £20,900, after charging depreciation of £2,500, exceptional expenses of £5,000 and making a profit on the disposal of a machine of £2,000. The balance sheet shows the following changes over the year: Trade receivables: increase by £2,500 Inventories: increase by £2,700Trade payables: decrease by £3,000 What is the net cash from operating activities? a) £25,900 b) £13,200 c) £28,400 d) £18,700
The king carpet company has $2,820,000 in cash and a total of $11,280,000 in current assets. The firms current liabilities equal $6,730,000 such that the firms current ratio equals 1.7. The company’s managers want to reduce the firm’s cash holdings down to $1,150,000 by paying $591,000 in cash to expand the firm’s truck fleet and using $1,079,000 in cash to retire a short term note. If they carry this plan through, what will happen to the firm’s current ratio? The new current ratio is Round to one decimal place.
Last year Rattner Robotics had $5 million in operatingincome (EBIT). Its depreciation expense was $1 million, its interest expense was $1 million,and its corporate tax rate was 40%. At year-end, it had $14 million in operating currentassets, $3 million in accounts payable, $1 million in accruals, $2 million in notes payable,and $15 million in net plant and equipment. Assume Rattner has no excess cash. Rattneruses only debt and common equity to fund its operations. (In other words, Rattner has nopreferred stock on its balance sheet.) Rattner had no other current liabilities. Assume thatRattner’s only noncash item was depreciation.a. What was the company’s net income?b. What was its net operating working capital (NOWC)?c. What was its net working capital (NWC)?d. Rattner had $12 million in net plant and equipment the prior year. Its net operatingworking capital has remained constant over time. What is the company’s free cashflow (FCF) for the year that just ended?e. Rattner has 500,000…
Best Feeds, Inc. has the following information on their income statement: Sales $2,000,000 Cash Costs 1,200,000 Depreciation 100,000 EBIT 700,000 Interest Expense 200,000 EBT 500,000 Taxes (25%) 125,000 Net Income $ 375,000 What is their NOPAT? Group of answer choices $427,620 $450,120 $375,000 $498,750 $525,000

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