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Finance: Ratio analysis

Please show work or calculations if you use a business calculator.

Use the following financial sheets and information for all questions.

The balance sheet and income statement shown below are for Apple Jax Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

Tax rate 40%
Stock price $17.00
Shares outstanding 3,800,000
Dividends are 50% of net income

Income Statement
Period Ending 31-Dec-13
Total Revenue 148,239,000
COGS 118,094,000
Selling General and Administrative 13,384,000
Depreciation 72,000
Earnings Before Interest And Taxes 16,689,000
Interest Expense 829,000
Income Before Tax 15,860,000
Income Tax Expense (40%) 6,344,000

Net Income 9,516,000
Balance Sheet
Date 31-Dec-13
Assets
Current Assets
Cash 14,468,000
Net Receivables 98,359,000
Inventory 18,758,000
Total Current Assets 131,585,000

Property Plant and Equipment 70,441,000

Total Assets 202,026,000

Liabilities
Current Liabilities
Accounts Payable 22,446,500
Accruals 14,315,500
Notes Payable 3,631,000
Total Current Liabilities 40,393,000

Long Term Debt 134,919,000

Total Liabilities 175,312,000

Stockholders' Equity
Common Stock 40,000
Retained Earnings 26,674,000

Total Stockholder Equity 26,714,000

Total Assets 202,026,000


Question/Problem 1) (Worth 30 points)
1. What is the firm's current ratio?
2. What is the firm's days-sales-outstanding (DSO)? Assume a 360-day year for this calculation.
3. What is the firm's total assets turnover?
4. What is the firm's inventory turnover ratio?
5. What is the firm's TIE?
6. What is the firm's ROA?
7. What is the firm's basic earning power?
8. What is the firm's ROE?
9. What is the firm's P/E ratio?
10. What is the firm's market-to-book ratio?

Question/Problem 2) (Worth 50 points)
Calculate the additional or external funds needed if the firm is expecting a growth rate of 10% next year. The firm is currently operating at 95% of capacity and the fixed assets can only by $10,000,000 increments.

Question/Problem 3) (Worth 20 points)
Calculate the common size balance sheet and the common size income statement for the company.

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Bus Finance
Practice Test - 2

Please show work or calculations if you use a business calculator. Use the following financial sheets and information for all questions.

The balance sheet and income statement shown below are for Apple JaxInc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

Tax rate 40%
Stock price $17.00
Shares outstanding 3,800,000
Dividends are 50% of net income

Income Statement
Period Ending 31-Dec-13
Total Revenue 148,239,000
COGS 118,094,000
Selling General and Administrative 13,384,000
72,000
Earnings Before Interest And Taxes 16,689,000
Interest Expense 829,000
Income Before Tax 15,860,000
Income Tax Expense (40%) 6,344,000

Net Income 9,516,000

Date 31-Dec-13
Assets
Current Assets
Cash 14,468,000
Net Receivables 98,359,000
Inventory 18,758,000
Total Current Assets 131,585,000

Property Plant and ...

Solution Summary

The problem set deals with ratio analysis. The balance sheet and income statement for Apple amortization rates are given.

$2.19