Fundamentals of Financial Management, Concise Edition (MindTap Course List)
9th Edition
ISBN: 9781305635937
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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Chapter 3, Problem 2DQ
Summary Introduction
To analyze: The long term debt and source of finance for Company W.
Introduction:
Long-term Debt:
The portion of total liabilities of a firm that will not be due in the current accounting period or within 1 year is called long term debt. It is usually, borrowed on fixed cost known as interest charges that is paid on periodical intervals.
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Use the following information to answer this question.
Windswept, Inc.2017 Income Statement($ in millions)
Net sales
$
9,390
Cost of goods sold
7,660
Depreciation
455
Earnings before interest and taxes
$
1,275
Interest paid
100
Taxable income
$
1,175
Taxes
411
Net income
$
764
Windswept, Inc.2016 and 2017 Balance Sheets($ in millions)
2016
2017
2016
2017
Cash
$
210
$
240
Accounts payable
$
1,290
$
1,335
Accounts rec.
960
860
Long-term debt
1,080
1,280
Inventory
1,750
1,665
Common stock
3,300
3,190
Total
$
2,920
$
2,765
Retained earnings
620
870
Net fixed assets
3,370
3,910
Total assets
$
6,290
$
6,675
Total liab. & equity
$
6,290
$
6,675
What is the quick ratio for 2017?
Use the following information to answer this question.
Windswept, Inc.2017 Income Statement($ in millions)
Net sales
$
9,000
Cost of goods sold
7,350
Depreciation
360
Earnings before interest and taxes
$
1,290
Interest paid
87
Taxable income
$
1,203
Taxes
421
Net income
$
782
Windswept, Inc.2016 and 2017 Balance Sheets($ in millions)
2016
2017
2016
2017
Cash
$
160
$
190
Accounts payable
$
1,150
$
1,332
Accounts rec.
840
740
Long-term debt
1,000
1,233
Inventory
1,570
1,565
Common stock
3,190
2,910
Total
$
2,570
$
2,495
Retained earnings
470
720
Net fixed assets
3,240
3,700
Total assets
$
5,810
$
6,195
Total liab. & equity
$
5,810
$
6,195
What is the equity multiplier for 2017?
Use the following information to answer this question.
Bayside, Inc.2017 Income Statement($ in thousands)
Net sales
$
6,040
Cost of goods sold
4,200
Depreciation
400
Earnings before interest and taxes
$
1,440
Interest paid
30
Taxable income
$
1,410
Taxes
423
Net income
$
987
Bayside, Inc.2016 and 2017 Balance Sheets($ in thousands)
2016
2017
2016
2017
Cash
$
115
$
220
Accounts payable
$
1,580
$
1,510
Accounts rec.
990
830
Long-term debt
810
610
Inventory
1,705
2,040
Common stock
3,240
3,280
Total
$
2,810
$
3,090
Retained earnings
880
1,130
Net fixed assets
3,700
3,440
Total assets
$
6,510
$
6,530
Total liab. & equity
$
6,510
$
6,530
What is the return on equity for 2017?
Chapter 3 Solutions
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Ch. 3 - Prob. 1QCh. 3 - Who are some of the basic users of financial...Ch. 3 - If a typical firm reports 20 million of retained...Ch. 3 - Explain the following statement: Although the...Ch. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Prob. 8QCh. 3 - How are managements actions incorporated in EVA...Ch. 3 - Explain the following statement: Our tax rates are...
Ch. 3 - Prob. 11QCh. 3 - How does the deductibility of interest and...Ch. 3 - BALANCE SHEET The assets of Dallas Associates...Ch. 3 - INCOME STATEMENT Byron Books Inc recently reported...Ch. 3 - INCOME STATEMENT Patterson Brothers recently...Ch. 3 - STATEMENT OF STOCKHOLDERS EQUITY In its most...Ch. 3 - MVA Harper Industries has 900 million of common...Ch. 3 - Prob. 6PCh. 3 - EVA Barton Industries has operating income for the...Ch. 3 - PERSONAL TAXES Susan and Stan Britton are a...Ch. 3 - BALANCE SHEET Which of the following actions are...Ch. 3 - STATEMENT OF STOCKHOLDERS EQUITY Electronics World...Ch. 3 - EVA For 2016, Gourmet Kitchen Products reported 22...Ch. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - FREE CASH FLOW Arlington Corporations financial...Ch. 3 - INCOME STATEMENT Edmonds Industries is...Ch. 3 - FINANCIAL STATEMENTS The Davidson Corporation's...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - FINANCIAL STATEMENTS, CASH FLOW, AND TAXES Laiho...Ch. 3 - Prob. 20ICCh. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQ
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