Practice #3.docx - Stock market price dec 2017 80 Common stock($5 par 3,000,000 Net income 1,700,000 Retained earnings jan 2018 1,900,000 If on December

Practice #3.docx - Stock market price dec 2017 80 Common...

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Stock market price dec 2017: 80 Common stock ($5 par): 3,000,000 Net income: 1,700,000 Retained earnings jan 2018: 1,900,000 If on December 31, the company wants to pay the max amount it can in dividends to shareholders, what’s the dividend ration? 7.5% Company Z has total liabilities 660,000 and total equity of 342,000. Company issues 12,000 shares of common stock at $15 per share in addition to borrow from the Bank A. Bank A requires a max debt to asset ratio of 0.64. What’s the max additional amount Company Z can borrow? 268,000 What’s true of liquidity? Liquidity is the ability to covert assets to cash. What focuses on the ability of a company to earn profits? The return on total assets Beg: Assets 560,000 RE 100,000 C. Stock 50,000 End: Assets 630,000 RE 110,000 C. Stock 50,000 If net income was 150,000, how much did they pay in dividends? 140,000 Profitability ratios such as ___ can be used to analyze and assess a company’s financial performance. Return on assets If sales is 1,000,000, cost of merchandise sold is 750,000, and average inventory is 220,000, how much would inventory turnover? 3.4 Quick ratio is computed as ___ Quick assets divided by current liabilities A company with working capital of 340,000 and a current ratio of 1.1 pays 2,100,000 of its liabilities using cash. What’s the current ratio after the 2,100,000 payment? 1.26
How to Retrieve Financial Statements The financial statements of all U.S. publicly traded companies are a matter of public record. You can obtain a copy either by: Visiting MorningStar Financials . In the search box, type the name of your company. On the next page, under the name of the company, select which financial statement you want (Balance Sheet, Income Statement, or Statement of Cash Flows). Make sure the "Statement Type" is set to "Annual." Then click on "Export" on the top right in order to export the financial statement in Excel format.

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