EBK FOUNDATIONS OF FINANCE
10th Edition
ISBN: 9780135160473
Author: KEOWN
Publisher: PEARSON CO
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Chapter 14, Problem 10SP
a)
Summary Introduction
To determine: Net income in 2019.
b)
Summary Introduction
To determine: Net income in 2019 and addition to
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Alpha Milk Corp is considering taking over their competitor, Dana Dairy Products, and asked your consultancy firm to perform financial statement analysis to assess feasibility of this strategic initiative. You are given the following key financial ratios, the firm’s income statement and the balance sheet. You can assume that there are 365 days in a year.
a) Using the information provided for 31 Dec 2005, calculate the following: net working capital, current ratio, quick ratio, inventory turnover, average collection period, total debt ratio, gross profit margin, net profit margin, return on total assets, return on equity.
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To answer, please refer to pictures attached
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…
River Valley Production Inc. seeks to increase its market share and improve its results. The company takes as a starting point the current scenario and the results obtained in 2018 and 2019. Like other companies, River Valley uses financial ratios (ratios) as tools for analyzing the results obtained at the end of the period. Consider the data presented in the financial statements below and analyze the company's results based on the financial ratios.1. Use the financial statements to calculate the following financial ratios for the years 2018 and 2019:1.8 Return on Investment (ROI)1.9 Profit Margin1.10 Debt to Equity Ratio1.11 Price/Earning Ratio
Balance Sheet
2018
2019
Cash
$63,000
$201,000
Accounts Receivable
199,000
305,000
Marketable Securities
81,000
42,000
Inventories
441,000
455,000
Prepaids
5,000
9,000
Total Current Assets
789,000
1,012,000
Property, Plant, and Equipment, net
858,000
858,000…
Chapter 14 Solutions
EBK FOUNDATIONS OF FINANCE
Ch. 14 - Prob. 1RQCh. 14 - Discuss the shortcomings of the percent of sales...Ch. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 1SPCh. 14 - Prob. 2SPCh. 14 - (Financial forecastingdiscretionary financing...Ch. 14 - (Financial forecastingpercent of sales) Next years...Ch. 14 - Prob. 5SPCh. 14 - (Percent of sales forecasting) Which of the...
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