# Ratio calculation / bond valuation

See the attached file.

Only

question 1 (a-d)

question 6 (a-d)

a. What is the company's average annual rate of sales growth from 2006 through 2008?

b. How long, on average, was Better Mouse Trap taking to collect on its receivable accounts in 2008? (Assume all of the company's sales were on credit.)

c. Was Better Mouse Trap more or less profitable in 2008 than it was in 2006? Justify your answer using at least two ratios.

d. Was Better Mouse Trap more or less liquid at the end of 2008 than it was at the end of

2006? Justify your answer using at least two ratios.

Question 6: (Bond valuation) 10 points

According to the Yahoo Finance Bond Center, dealers are currently offering the US government's 8.5% 2020 Treasury Bond for "142.12." Answer the following questions about the bond:

a. What is the price in dollars of the bond?

b. What is the amount of the coupon interest payment you would receive each year if you bought the bond? (assume annual payments)

c. How many payments would you receive if you bought the bond and held it to maturity? (In other words, how many years from now does the bond have to go before it matures?)

d. What is the bond's Yield to Maturity, or YTM, assuming you purchased it for the current offering price?

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#### Solution Summary

The solution has two questions relating to ratio calculations and bond valuation. Please note the questions in the attached file are more but the solution is only for Q 1 and Q 6