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IF Homework Set 1 - Establish the cash flow identity of...

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BUSFIN 1030 – Introduction to Finance Homework Set 1 Using the information for AT&T Inc. below, answer questions 1 through 5: AT&T INC. (Simplified) Balance Sheets as of December 31, 2007 and 2008 ($ in billions) 2008 2007 2008 2007 Cash 4.4 5.5 Accounts payable 28.2 32.4 Accounts receivable 16.0 16.2 Notes payable 14.1 6.9 Inventories 2.2 3.0 Current liabilities Current assets Long-term debt 126.6 121.0 Net PPE 99.1 95.9 Goodwill 71.8 70.7 Common stock 59.7 82.0 Intangibles 71.7 84.3 Retained earnings 33.3 Net fixed assets Owners’ equity Total assets Total liabilities and owners’ equity AT&T INC. (Simplified) Income Statement for 2008 ($ in billions) Net sales 124.0 COGS 49.9 SGA 31.2 Depreciation expense 19.9 EBIT Interest expense 3.2 Taxable income Taxes 7.0 Net income Dividends paid Additions to retained earnings 3.3 1.
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Unformatted text preview: Establish the cash flow identity of AT&T for its 2008 fiscal year. 2. Measure the following ratios of AT&T for its 2008 fiscal year. a. Total debt ratio b. Profit margin c. PE ratio ( Note: AT&T’s stock closed at $28.50 a share and the company had 5.9 billion shares outstanding on December 31, 2008.) d. PEG ratio ( Note: AT&T generated $12 billion net income during its 2007 fiscal year.) e. Tobin’s q ratio (Market-to-book assets ratio) 3. Establish the Du Pont identity of AT&T for its 2008 fiscal year. 4. Measure AT&T’s internal growth rate using data from its 2008 fiscal year. 5. Measure AT&T’s sustainable growth rate using data from its 2008 fiscal year. © 2003-2009 Mehmet Yalin...
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