Nucor-Questions-MidTerm

Nucor-Questions-MidTerm - 1 of 5 Nucor Nucor 90310[Cash...

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Nucor 1 of 5 Nucor 90310 [Cash flow, Depreciation, LIFO-FIFO] Sections of the 1993 annual report of Nucor Corporation is attached. An extract from the 10 - K form of Nucor, relating to property, plant and equipment is also included. Questions: A. Using the available financial statements and the notes to the consolidated financial statements, prepare a consolidated statement of cash flows. You can choose either the direct method or the indirect method. B Compute the following ratios: B1 Return on equity. B2 Return on assets (after tax). B3 Average debt to average equity B4 Average interest rate. B5 Average Book value of equity per share in 1993. B6 Guess the stock price of Nucor on December 31,1992 and 1993. C Compute the following figures: C1 Relative age of property, plant and equipment as a percentage of the depreciable life. C2 Average depreciable life of all the property, plant and equipment. C3 Average age of the firm's fixed assets (property, plant equipment). D Note 3 to the financial statements describes the accounting method used by Nucor for inventories. D1 Suppose Nucor used the FIFO method for accounting for all its inventories. What would be the effect on the net income of Nucor for 1993? D2 Suppose Nucor used the LIFO method for accounting for all its inventories. What would be the effect on the net income of Nucor for 1993? D3 Did the inventories of Nucor increase or decrease from 1992 to 1993 in real terms. What was the real growth (or decrease) in inventories? h To answer the questions about inventories, assume that the FIFO inventory values approximate the current cost values. Note that Nucor used both the FIFO and the LIFO methods partially for inventories.
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Nucor 2 of 5 Nucor Consolidated Balance Sheets December 31, 1993 1992 Increase Assets Current assets: Cash and short - term investments 27,255 25,547 1,708 Accounts receivable (Note 2). 202,176 132,143 70,033 Inventories (Note 3). 215,015 206,405 8,610 Other current assets. 23,786 17,521 6,265 Total current assets. 468,232 381,616 86,616 Property, plant and equipment (Note 4). 1,361,036 1,125,766 235,270 1,829,268
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Nucor-Questions-MidTerm - 1 of 5 Nucor Nucor 90310[Cash...

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