Mid-Term (WK5)

Mid-Term (WK5) - Mid-Term (WK5) 1. The ultimate owner(s) of...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Mid-Term (WK5) 1. The ultimate owner(s) of an ongoing corporation are ( Points: 2 ) ( CH1, P18 ) the federal government. the debt holders. the equity holders. the executive staff of the corporation. 2. Which of the following is a valid criticism concerning the goal of firms to maximize profits? ( Points: 2 ) ( CH1 ) profit maximization ignores expenses profit maximization is completely unrelated to shareholder wealth profit maximization may ignore the timing of those profits there are no valid criticisms of profit maximizing firms 3. Balance Sheet: 12/31/04 Assets 2004 2003 Cash and Marketable Securities 10 80 Accounts Receivable 375 315 Inventories 615 415 Total Current Assets 1,000 810 Net plant and equipment 1,000 870 TOTAL ASSETS 2,000 1,680 Liabilities and Equity 2004 2003 Accounts Payable 60 40 Notes Payable 140 60 Accruals 110 130 Total Current Liabilities 310 230 Long Term Bonds 754 580 TOTAL DEBT 1,064 810 Preferred Stock 40 40 Common Stock 130 130 Retained earnings 766 700 TOTAL COMMON EQUITY 896 830 TOTAL LIABILITIES AND EQUITY 2,000 1,680 Income Statement: 12/31/04 2004 2003 Net Sales 3,200 2,850 Operating Costs (excludes Dep/Amortization) 2,700 2,497 EBITDA 500 353 Depreciation 100 90 Amortization Depreciation and Amortization 100 90 EBIT 400 263 Less Interest 88 60 EBT 312 203 Taxes (40%) 124.8 81.2 NET INCOME (before Preferred Dividends) 187.2 121.8 Preferred Dividends 4 4 NET INCOME 183.2 117.8 Common Dividends 117 53 Addition to Retained Earnings 66.2 64.8 Refer to Stone Cold. For 2004, what was the return on assets? ( Points: 2 ) ( CH2 ) 9.16% =183.2/2000= 9.16% 12.40% 15.60% 20.00% 4. Referring to Stone Cold data below. For 2004, what was the debt-to-equity ratio? ( Points: 2 ) ( CH2 ) Balance Sheet: 12/31/04 Assets 2004 2003 Cash and Marketable Securities 10 80 Accounts Receivable 375 315 Inventories 615 415 Total Current Assets 1,000 810 Net plant and equipment 1,000 870 TOTAL ASSETS 2,000 1,680 Liabilities and Equity 2004 2003 Accounts Payable 60 40 Notes Payable 140 60 Accruals 110 130 Total Current Liabilities 310 230 Long Term Bonds 754 580 TOTAL DEBT 1,064 810 Preferred Stock 40 40 Common Stock 130 130 Retained earnings 766 700 TOTAL COMMON EQUITY 896 830 TOTAL LIABILITIES AND EQUITY 2,000 1,680 Income Statement: 12/31/04 2004 2003 Net Sales 3,200 2,850 Operating Costs (excludes Dep/Amortization) 2,700 2,497 EBITDA 500 353 Depreciation 100 90 Amortization Depreciation and Amortization 100 90 EBIT 400 263 Less Interest 88 60 EBT 312 203 Taxes (40%) 124.8 81.281....
View Full Document

This note was uploaded on 08/23/2011 for the course CS 300 taught by Professor Matthewhoward during the Fall '09 term at Park.

Page1 / 10

Mid-Term (WK5) - Mid-Term (WK5) 1. The ultimate owner(s) of...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online