Shown below is the Profit & Loss Statement of start-up company THE PEANUT BETTER CO. Let us assume that all figures shown are average monthly projections. Their investment exactly 12 months ago from today was PHP133,000.00. THE PEANUT BETTER CO. ... Spreads & Breads "Online - Anytime - All The Time" Total Investment: 133,000.00 NET SALES 50,000.00 Less: Cost of Goods Sold 25,000.00 Gross margin 25,000.00 Less: Operating expenses 13,900.00 Less: Depriciation 500.00 Total Operating Expenses 15,000.00 Net Operating Profit 10,000.00 Less: Taxes 500.00 Net Profit After Taxes 9,500.00 Compute for the following: 1. How long will it take them to achieve ROI? 2. How much do they need to earn monthly to achieve ROI in 1 year?
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- Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers sales last year were 3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was 1,800,000. The firm had fixed assets totaling 535,000. Stricklers payables deferral period is 45 days. a. Calculate Stricklers cash conversion cycle. b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Stricklers managers believe the annual inventory turnover can be raised to 9 times without affecting sale or profit margins. What would Stricklers cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9 for the year?Suppose the company has just the opposite news and now expects unit sales for August, September, and October to be double (200%) the original estimates. What effect will this have on the company’s net income and borrowing? Explain your findings.Forecasted Statements and Ratios Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Uptons balance sheet as of December 31, 2018, is shown here (millions of dollars): Sales for 2018 were 350 million, and net income for the year was 10.5 million, so the firms profit margin was 3.0%. Upton paid dividends of 4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 40%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2019. a. If sales are projected to increase by 70 million, or 20%, during 2019, use the AFN equation to determine Uptons projected external capital requirements. b. Using the AFN equation, determine Uptons self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? c. Use the forecasted financial statement method to forecast Uptons balance sheet for December 31, 2019. Assume that all additional external capital is raised as a line of credit at the end of the year and is reflected (because the debt is added at the end of the year, there will be no additional interest expense due to the new debt). Assume Uptons profit margin and dividend payout ratio will be the same in 2019 as they were in 2018. What is the amount of the line of credit reported on the 2019 forecasted balance sheets? (Hint: You dont need to forecast the income statements because the line of credit is taken out on the last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2019 addition to retained earnings for the balance sheet without actually constructing a full income statement.)
- You are doing some financial analysis research for your work and managed to get (incomplete) data. You will use this data to deduce the required information. You can assume 365 days in a year. a) Alpha Co. reported a cost of goods sold of $64,380.00 and an accounts payable balance of $16,700.00 last year. Compute the average time taken to pay suppliers. Discuss the significance of a longdays’ costs in payables for the firm. b) Bravo Ltd. equity multiplier is 1.93, its total asset turnover is 2.65, and its profit margin is 4.20 percent. Compute the Return on Equity (ROE). Explain the impact on ROE, should the total asset turnover decline next year. c) Charlie Inc. has a profit margin of 7.90 percent, a total asset turnover of 1.54, and a Return on Equity (ROE) of 13.47 percent. Solve for the debt-equity ratio. d) Delta GMBH’s ROE is 8.9 percent. Sales are $2,956,000.00. Total debt ratio is 0.3743. Total debt is $964,000.00. Determine the return on assets (ROA).1. Aboridor company had the following results last year: Sales, P700,000; Return on Investment, 28%; and profit margin of 8%. How much was the operating assets last year? 2. Jadafe makes all purchases on account, subject to the following payment pattern:Paid in the month of purchase .................. ..... 30%Paid in the first month following the purchase ....... 60%Paid in the second month following the purchase .. 10%If purchases for January, February and March were P200,000; P180,000; and P230,000,respectively, what were the firm’s budgeted payments in March? 3. Ariba Company Consists of two stores, Amina and Ramina. Store Amina has a sales of P80,000 during April,a contribution margin ratio of 30% and a segment margin of P11,000. The company as awhole had sales of P200,000, a contribution margin of 36%, segment margin for the twostores totalling P31,000. If the net income of the company was P15,000 for the month, whatmust have been the traceable fixed expenses in Store Ramina.Carr Auto Wholesalers had sales of $1,040,000 in 20XX, and the cost of goods sold represented 74 percent of sales. Selling and administrative expenses were 12 percent of sales. Amortization expense was $11,000 and interest expense for the year was $14,000. The firm’s tax rate is 30 percent. Q: Compute earnings after taxes using the percentage-of-sales method. (Image 1 is the reference) Q: Assume the firm hires Ms. Hood, an efficiency expert, as a consultant. She suggests that by increasing selling and administrative expenses to 14 percent of sales, sales can be increased to $1,090,200. The extra sales effort will also reduce cost of goods sold to 70 percent of sales (There will be a larger mark-up in prices as a result of more aggressive selling). Amortization expense will remain at $11,000. However, more automobiles will have to be carried in inventory to satisfy customers, and interest expenses will go up to $21,200. The firm’s tax rate will remain at 30 percent. Compute revised…
- Sunrise Company sells 3, 650 frying pans per year. The owner has invested $80, 000 in the business and desires an 8% return on his investment (ROI = Net Income Investments). Product Costs VC $4.5 per pan FC $78,000 per year Selling and Administrative Costs VC $3.00 per pan FC $15,000 per year If Sunrise uses the income statement bottom-up forecasting to estimate revenue and absorption cost-based pricing, what is its selling price and markup percentage? A. 5.32% and $34.73 B. 34.25% and $34.73 C. 27.48% and $32.98 D. 363% and $34.73Provincial Imports, Inc., has assembled last year's financial statements (income statement and balance sheet LOADING... ) and financial projections for use in preparing financial plans for the coming year. Information related to financial projections for next year is as follows: (1) Projected sales are $6,006,000. (2) Cost of goods sold last year includes $998,000 in fixed costs. (3) Operating expense last year includes $246,000 in fixed costs. (4) Interest expense will remain unchanged. (5) The firm will pay cash dividends amounting to 35% of net profits after taxes. (6) Cash and inventories will double. (7) Marketable securities, notes payable, long-term debt, and common stock will remain unchanged. (8) Accounts receivable, accounts payable, and other current liabilities will change in direct response to the change in sales. (9) A new computer system costing $364,000 will be purchased during the year. Total depreciation expense for the year will be $116,000.…Last year Delightful Desserts had a quick ratio of 2.2, a current ratio of 5.0, an inventory turnover of 8, total current assets of $285,000, and cash and equivalents of $36,000. If the cost of goods sold equaled 80 percent of sales, what were Bailey's annual sales and days' sales outstanding (DSO)? Assume there are 360 days in a year. Round your answer for annual sales to the nearest dollar and answer for DSO to one decimal place. Annual sales: $ DSO:
- Slosh Cleaning Corporation services both residential and commercial customers. Slosh expects the following operating results next year for each type of customer: Residential Commercial Sales P60,000 P140,000Contribution margin ratio 50% 30% Slosh expects to have P50,000 in fixed expenses next year. What would Slosh's peso sales revenues from Commercial customers have to be next year in order to generate a profit of P166,000?Starborn Company has just been established as a new company to manufacture furniture. The company expects to earn $1 million after-taxes during its first year. The company president has asked for a projected balance sheet based on ratios similar to the industry average. Assuming all sales are made on credit, calculations utilize a 365-day year, and final numbers are rounded to the nearest thousand, prepare a projected balance sheet for Starborn based on the following industry ratios: Current Ratio: 2:1 Quick Ratio: 1:1 Net Profit Margin: 10% Average Collection Period: 20 days Debt Ratio: 40% Total Asset Turnover Ratio: 2 times Current Liabilities/Stockholder's Equity: 20% Create your balance sheet based on the following format: Cash Total Current Liabilities Accounts Receivable Long-term Debt Inventory Total Debt Total Current Assets Stockholder's Equity Net Fixed Assets Total Liabilities and…Last year, Hassan’s Madhatter, Inc. had an ROA of 5.8 percent, a profit margin of 18.50 percent, and sales of $10 million. Calculate Hassan’s Madhatter’s total assets. (Enter your answer in dollars, rounded to the nearest dollar.)