PRIN.OF CORPORATE FINANCE >BI<
12th Edition
ISBN: 9781260431230
Author: BREALEY
Publisher: MCG CUSTOM
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Chapter 28, Problem 12PS
Summary Introduction
To compute: The amount of cash and marketable securities.
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(Liquidity analysis) The most recent balance sheet of Raconteurs, Inc., (in millions) is found here:
LOADING...
.
a. Calculate Raconteurs' current ratio and acid-test (quick) ratio.
b. Benchmark ratios for the current and acid-test (quick) ratio are
1.46
and
1.23,
respectively. What can you say about the liquidity of Raconteur's operations based on these two ratios?
Current assets
Cash and marketable securities
$10.2
Accounts receivable
$39.8
Inventory
$60.4
Total current assets
$110.4
Current liabilities
Accrued wages and taxes
$4.7
Accounts payable
$34.9
Notes payable
$29.2
Total current liabilities
$68.8
A bank has risk-weighted assets or $425 million and the following sources of regulatory capital (in $ millions): Allowance for Loan Losses $3.02 Common Stock (Par) $0.85 Intermediate-Term Preferred Stock $4.87 Perpetual Preferred Stock $3.43 Subordinated Debt $3.24 Surplus $7.83 Undivided Profit $20.04 What is the bank's ratio of Tier 2 capital to risk-weighted assets? _______ . Calculate the answer by read surrounding text. Express in %, to the nearest 0.01%; drop the % symbol.
Calculating Liquidity Ratios [LO2] SDJ, Inc., has net working capital of$1,370, current liabilities of $3,720, and inventory of $1,950. What is the currentratio? What is the quick ratio?
Chapter 28 Solutions
PRIN.OF CORPORATE FINANCE >BI<
Ch. 28 - Prob. 1PSCh. 28 - Financial ratios Table 28.10 gives abbreviated...Ch. 28 - Performance measures Look again at Table 28.10. At...Ch. 28 - Prob. 5PSCh. 28 - Financial ratios True or false? a. A companys...Ch. 28 - Book rates of return Keller Cosmetics maintains an...Ch. 28 - Prob. 8PSCh. 28 - Prob. 9PSCh. 28 - Prob. 10PSCh. 28 - Prob. 11PS
Ch. 28 - Prob. 12PSCh. 28 - Prob. 13PSCh. 28 - Prob. 14PSCh. 28 - Performance measures Describe some alternative...Ch. 28 - Prob. 16PSCh. 28 - Prob. 17PSCh. 28 - Prob. 18PSCh. 28 - Financial ratios Sara Togas sells all its output...Ch. 28 - Prob. 20PSCh. 28 - Prob. 21PSCh. 28 - Prob. 22PSCh. 28 - Prob. 23PSCh. 28 - Prob. 25PSCh. 28 - Prob. 26PSCh. 28 - Prob. 27PS
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- Oasis Products, Incorporated has current liabilities = $10 million, current ratio = 1.5 times, inventory turnover ratio = 12 times, average collection period = 20 days, and sales = $100 million. What is the value of their cash and marketable securities? Multiple Choice a.$1,187,215 b.$8,333,333 c.$17,146,188 d.$15,000,000arrow_forwardDawson Corp. reports the following information: Net cash provided by operating activities: $285,000 Average current liabilities: $150,000 Average non-current liabilities: $100,000 Dividends declared: $60,000 Capital expenditures: $110,000 Payment of long-term debt: $35,000 What is Dawson's cash debt coverage ratio? Question 11 options: 1.14 1.90 2.28 2.85arrow_forwardCash Equation Blitz Corp. has a book value of equity of $17,010. Long-term debt is $8,400. Net working capital, other than cash, is $2,150. Fixed assets are $22,430 andcurrent liabilities are $2,260. How much cash does the company have? What are current assets?arrow_forward
- Assume Bismuth Electronics has a book value of $6 billion of equity and a face value of $19.7 billion of debt. The market values of equity and debt are $2.5 billion and $18.5 billion. A Wall Street financial analyst determines values of equity and debt as $3 billion and $20 billion. Which of the following values should be used for calculating the firm's WACC? A) $6 billion of equity and $19.7 billion of debt B) $2.5 billion of equity and $20 billion of debt C) $3 billion of equity and $19.9 billion of debt D) $2.5 billion of equity and $18.5 billion of debtarrow_forwardLiquidity Ratios NWAs financial statements contain the following information: Note: Round answers to two decimal places. Required: 1. What is its current ratio? 2. What is its quick ratio? 3. What is its cash ratio? 4. Discuss NWAs liquidity using these ratios.arrow_forwardRatios Analyses: McCormick Refer to the information for McCormick above. Additional information for 20X3 it as follows (amounts in millions): Required: Next Level Compute the following for 20X3. Provide a brief description of what each ratio reveals about McCormick 1. return on common equity 2. debt-to-assets 3. debt-toequity 4. current 5. quick (McCormick uses cash and equivalents, short-term securities and receivables in their quick ratio calculation.) 6. inventory turnover days 7. accounts receivable turnover days 8. accounts payable turnover days 9. operating cycle (in days) 10. total asset turnover Use the following information for 14-17 and 14-18: The Hershey Company is one of the worlds leading producers of chocolates, candies, and confections. It sells chocolates and candies, mints and gums, baking ingredients, toppings, and beverages. Hersheys consolidated balance sheets for 20X2 and 20X3 follow.arrow_forward
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