HW_5_Solutions_Chapters_3_4[1]

HW_5_Solutions_Chapters_3_4[1] - HW 5 Solutions Chapter 3...

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HW 5 Solutions Chapter 3 1. Vertical Common-Size 2005 $ 2005% Cash 200 0.65% A/R 1,800 5.81% Inventories 8,000 25.81% Total Current Assets 10,000 32.26% PPE 20,000 64.52% Intangible 1,000 3.23% Total Assets 31,000 100.00% A/P 500 1.61% Debt Due in 1 yr 1,000 3.23% Long-term Debt 12,000 38.71% Shareholder’s equity 17,500 56.45% Total Liabilities + Equity 31,000 100.00% 2. COGS = 20,000 Revenue = 25,000 COGS % = 3. Horizontal is based on a benchmark year. In this case the benchmark year is 2003. Income Statement 2005 2004 2003 COGS % 117.65% 105.88% 100.00% Cost of Sales 20,000 18,000 17,000 4. Income Statement 2005 2004 2003 Revenues % 119.05% 104.76% 100.00% Revenues 25,000 22,000 21,000
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Chapter 4 5. The quick ratio has increased overtime which means improved liquidity. Quick Ratio 2005 2004 2003 1.33 0.84 0.62 6. Profit margin and asset turnover increased slightly more than leverage decreases to increase the ROE from 2004 to 2005. 2005
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This note was uploaded on 09/06/2011 for the course FIN 351 taught by Professor Li during the Spring '09 term at S.F. State.

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HW_5_Solutions_Chapters_3_4[1] - HW 5 Solutions Chapter 3...

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