Homework_1 FI 311

# Homework_1 FI 311 - year 2009 is 365(30 points NWC = CA –...

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HW #1 Due: July 13, 2010, 11PM. Please submit it to ANGEL Drop Box. Chapter 2: 1. (P40 Extra Problem 1) – 50 points Balance Sheet 2005. Balance Sheet 2006. Inc. Statement Stockholders Equity = 197 Total Assets = 546 Taxes (.3) = 55.2 Current Assets = 228 Current Liab = 255 EBIT = 226 , EBT = 184 Total Liab/Stock Eq = 439 Fixed Assets = 398 Net Income = 128.80 (A.) OCF = 226+345-55.2 = 515.8 Or OCF= 128.8+42+345 = 515.8 (B.) chg. NCS = (398 -211) + (345) = 532.00 (C.) chg. NWC = (148 -255) – (228 -190) = (-)107 -38 = (-)145 (D.)CF (from Assets) = OCF – (chg.) NCS – (chg.) NWC CF(A) = 515.8 – 532 + 145 = 128.80 Chapter 3:

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2. Kerrie Glass, Inc. had days in inventory of 7 in 2009. Cost of goods sold was \$6,626,000. If the company had \$120,000 in net working capital and total current assets of \$600,000, what was the company’s quick ratio? The number of days in
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Unformatted text preview: year 2009 is 365. (30 points) NWC = CA – CL 120 = 600 - x CL = 480,000 Days in Inventory = Days in Period/Inventory Turnover Inventory Turnover = 365/7 = 52.14 Inventory Turnover = COGS / Inventory (avg.) Inventory = 6,626,000/52.14 = 127,080.94 Quick Ratio = (CA – Inventory) / CL Quick Ratio = (600,000 – 127,080.94) / 480,000 = (472,919.06) / 480,000 = .99 3. Firm XYZ has an Equity Multiplier of 1.7. What are the firm’s Debt Ratio and Debt-to-Equity Ratio? (20 points) Equity Multiplier – 1.7 Debt-to-Equity Ratio = EM – 1 = 1.7 – 1 = (.7) EM = A / E (Sub A=1) 1.7 = 1 / E or E = 1 / 1.7 = .59 E = A – D or .59 = 1 – D D = .41 Debt Ratio = D / A or .41/1 = .41...
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