1. Define the process of accounting.
Accounting is the process of identifying, measuring, and
communicating economic information about an
organization for he purpose of making decisions and
2. What are the three major divisions in the
1. Describe the field of finance. How is it different from the field
The field of finance is a very broad and influential field that hits
every side of the business in great detail. It is important to know
and understand the depth of this f
Part 3, Ratio Analysis
Comments on Liquidity: Both companies increase the liquidity from 2014 to
2015. Which means they are
STARBUCKS CORP (SBUX) INCOME STATEMENT
Fiscal year ends in September. USD in millions except per share data.
Cost of revenue
Sales, General and administrative
Restructuring, merger and acquisition
Other operating ex
Homework Assignment for Week 1:
Each week you will have a set of homework problems to complete. They are due by the
following Sunday night at 11:59 pm, US central time.
For Week 1, please turn in the answers to the following questions:
Final Exam, Part B
1.) Pine Tree Farms Corporation (PTFC) has a target capital structure of 20% debt, 10% preferred stock, and 70% comm
debt is 4.5%. The preferred stock has a par value of $100 per share, a $5 per share dividend
Week 9 Homework
1.) Define the following terms:
a. Current Assets: consists of those assets of the business that are expected to be "turned into cash" w
b. Current Liabilities: are those obligations of the firm (debts) which ar
Week 8 Homework
1.) The FINC 5000 Associates Corporation (FAC) has begun selling a new product and they want you to help them with
To begin with, FAC is sure sales will grow 20% next year. Assume that is true. Then
Week 6 Homework
1.) List the three steps that make up the general approach to capital budgeting.
1.) Identify projects that look promising
2.) Forecast the incremental cash flows associated with the projects
3.) Evaluate the pro
Week 7 Homework
1.) When analysts use the term capital structure, what are they referring to?
Captial structure refers to the proportion of debt and equity being used to finance a firm's assets.
Assets = Debt + Equit
Midterm Exam Part B
Question 1: (Financial Statement Analysis) 10 points
Consider the following sets of financial statements and answer the questions that follow:
a.) Which firm is the most liquid? Why? (Justify your answer wit
Week 5 Homework
1.) What does it mean when people refer to a firms cost of capital?
A firm's cost of capital is the minimum average rate of return it must earn on investments because it m
2.) What are the three compo
Week 4 Problems
Ch.17 Problems 1,2,3,6,10
Ch.19 Problems 1,2,4
1. At todays spot exchange rates 1 U.S. dollar can be exchanged for 9 Mexican pesos or for
111.23 Japanese yen. You have pesos that you would like to exchange for yen. What is the
Week 3 Problems. Ch 14: 1,4,5,6,10. Ch 18: 1,2
1. Puckett Products is planning for $5 million in capital expenditures next year. Pucketts
target capital structure consists of 60% debt and 40% equity. If net income next year is $3
million and Pu
Chapter 8 Problems 1,3,4
Chapter 26 Problem 1
Problem 1. A call option on the stock of Bedrock Boulders has a market price of $7. The stock sells for
$30 a share, and the option has a strike price of $25 a share.
What is the exercise value of th
Week 4 Homework
1.) What are the two kinds of stock corporations issue to finance their assets? List the main cha
The two kinds of stock corporations issue are:
1.) Common Stock
- Represents ownership. The holders of a company
a. Face Value - the amount that the bond promises to pay its owner at some date in the futu
b. Maturity Date - the date on which the issuer is obligated to pay the bondholder the bond
c. Coupon Interest - the interest paym
It is necessary to know about the time value of money concepts in order to make better judgements about projects
Future value (FV) is the value of one or more cash flows that you expect to receive at a designated time or times in t
1.) Finance and accounting are very similar. Accounting is figuring out how much money someone has and finance is d
2.) The three forms of business generally encountered in the US are sole proprietorship, partnership, and corporation.
CHAPTER 5. BREAKEVEN ANALYSIS PROBLEMS.
1. Warner Tool Company produces class rings to sell to college and high school
students. These rings sell for $75 each, and cost $35 each to produce. Warner Tool
Company has fixed costs of $50,000.
a) Calculate Warn
Matching asset mix and financing plans. Colter Steel has $4,200,000 in assets.
Temporary current assets.
Permanent current assets.
Short-term rates are 8 percent. Long-term rates are 13
Facebook Prospectus Project
Review the Facebook Prospectus and answer the following questions.
1. How many total shares of stock are being offered by Facebook?
2. How many shares are new shares, and how many are existing shares being sold by c
Pro Forma Income Statement
(all numbers in thousands of dollars)
Cost of Revenue
Selling General and Administrative
Operating Income or Loss
1. The exercise price on a call option is $30 and the price of the underlying stock is $35. The option will expire in 35 da
currently selling for $5.75.
a. Calculate the option's exercise value?
Exercise value of call option = Current price of stock - Str
Consolidated Balance Sheets
(Dollars in millions, except share amounts)
Cash and cash equivalents
Restricted cash (includes $23,982 and $61,976, respectively, related to consolidated trusts
Federal funds sold and sec
The formula for the conversion price = Pc = par value of bond given up/shares received and will give us
the conversion price in this case. The higher the ratio, the higher the number of shares exchanged.
In this discussion we have been given the conversio
Donald Bryant's Week 3 Homework
Chapter 25: Problems 1, 2
1. Define the following terms, using graphs or equations to illustrate your answers wherever feasible:
a. Portfolio- a collection of investments held by an investment company, institution or indivi
Donald Bryant's Week 8 Homework
Chapter 24: Problems 2 and 3
1. The Verbrugge Publishing Company's 2012 balance sheet and income statement are as follows (in millions of do
a. Consturct the projhected balance sheet while assuming that reorganization takes
Donald Bryant's Week 4 Homework
Chapter 22: Problems 1, 2, 3
Chapter 23: Problems 3, 4, 5
1. What is the value of Vandell's operations? If Vandell has $10.82 million in debt, what is the current value of Vandell's stoc
Free Cash Flow 1=