View the step-by-step solution to:

Course Textbook: Ehrhardt, M. & Brigham, E. (2011). Financial Management: Theory and Practice (13th ed. Mason, OH: South-Western Cengage...

Hello I need to resolve these questions as soon as possible. Thank you.
Course Textbook: Ehrhardt, M.C. & Brigham, E.F. (2011). Financial Management: Theory and Practice (13 th ed.). Mason, OH: South-Western Cengage Learning. Workshop 1 Assignments 1.. Give answers to the following problems: i. Complete the balance sheet and sales information in the table that follows for Hoffmeister Industries using the following financial data: Quick ratio: 0.80 Total assets turnover: 1.5 Days sales outstanding: 36.5 days (calculation is based on a 365-day year) Gross profit margin on sales: (sales – cost of goods sold)/sales = 25% Inventory turnover ratio: 5.0 Cash Accounts payable Accounts receivable Long-term debt 60,000 Inventories Common stock Fixed assets Retained earnings 97,500 Total assets $300,000 Total liabilities and equity Sales Cost of goods sold ii. Data for Morton Chip Company and its industry averages follow. Balance Sheet as of December 31, 2010 (thousands of dollars) Cash $77,500 Accounts payable $129,000 Receivables 336,000 Notes payable 84,000 Inventories 241,500 Other current liabilities 117,000 Total current assets Total current liabilities $330,000 Net fixed assets 292,500 Long-term debt 256,500 Common equity 361,000 Total assets $947,500 Total liabilities and equity $947,500 Income Statement for the Year ended December 31, 2010 (thousands of dollars) Sales $1,607,500 Cost of goods sold 1,392,500 Selling, general, and administrative expenses 145,000 Earnings before interest and taxes (EBIT) $70,000 Interest expense 24,000 Earnings before taxes (EBT) $45,500
Background image of page 1
Federal and state income taxes (40%) 18,200 Net income $27,300 Ratio Morton Industry Averages Current assets/current liabilities 2.0 Days sales outstanding* 35.0 days Sales/inventory 6.7 Sales/fixed assets 12.1 Sales/total assets 3.0 Net income/sales 1.2% Net income/total assets 3.6% Net income/common equity 9.0% Total debt/total assets 60.0% *Calculation is based on a 365-day year. a. Calculate the indicated ratios for Morton. b. Construct the extended Du Pont equation for both Morton and the industry. c. Outline Morton’s strengths and weaknesses as revealed by your analysis. iii. Find the following values: a. An initial $500 compounded for 10 years at 6% b. An initial $500 compounded for 10 years at 12% c. The present value of $500 due in 10 years at a 6% discount rate d. The present value of $500 due in 10 years at a 12% discount rate iv. Find the future value of the following annuities. a. $400 per year for 10 years at 10% b. $200 per year for 5 years at 5% c. $400 per year for 5 years at 0% d. Now rework parts a, b, and c assuming the payments are made at the beginning of each year; that is, they are annuities due. v. Find the present value of the following ordinary annuities. a. $400 per year for 10 years at 10% b. $200 per year for 5 years at 5% c. $400 per year for 5 years at 0% d. Now rework parts a, b, and c assuming the payments are made at the beginning of each year; that is, they are annuities due. vi. Find the amount to which $500 will grow under each of the following conditions. a. 12% compounded annually for 5 years b. 12% compounded semiannually for 5 years c. 12% compounded quarterly for 5 years d. 12% compounded monthly for 5 years vii. Find the present value of $500 due in the future under each of the following conditions. a. 12% nominal rate, semiannual compounding, discounted back 5 years
Background image of page 2
Show entire document
Sign up to view the entire interaction

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question