Explore BrainMass
Share

Explore BrainMass

    Financial ratios for Just Dew It, Braam Fire; Cash flows for

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Question 7: (15 points)

    Calculating Financial Ratios
    Just Dew It Corporation reports the following balance sheet information for 2004 and 2005.

    JUST DEW IT CORPORATION
    2006 and 2007 Balance Sheets
    Assets Liabilities and Owners' Equity
    2006 2007 2006 2007
    Current assets Current liabilities
    Cash $ 10,800 $ 10,500 Accounts payable $ 58,500 $ 66,000
    Accounts receivable 27,900 28,000 Notes payable 41,750 41,000
    Inventory 64,500 61,300 Total $ 100,250 $ 107,000
    Total $ 103,200 $ 99,800 Long-term debt $ 56,600 $ 63,900
    Fixed assets Owners' equity
    Net plant and equipment $ 341,000 $ 335,000 Common stock and paid-in surplus $ 87,000 $ 87,000
    Retained earnings 200,350 176,900
    Total $ 287,350 $ 263,900
    Total assets $ 444,200 $ 434,800 Total liabilities and owners' equity $ 444,200 $ 434,800
    ________________________________________

    Based on the given balance sheets, calculate the following financial ratios for each year (Do not include the percent sign (%). Negative amount should be indicated by a minus sign. Round your answers to 2 decimal places, e.g. 32.16.):

    2006 2007
    a. Current ratio

    b. Quick ratio

    c. Cash ratio

    d. NWC to total assets ratio

    e. Debt-equity ratio

    Equity multiplier

    f. Total debt ratio

    Long-term debt ratio

    ________________________________________
    Question 8: (8 points)

    Du Pont Identity
    Braam Fire Prevention Corp. has a profit margin of 9.3 percent, total asset turnover of 1.78, and ROE of 18.54 percent. The firm's debt-equity ratio is times. (Round your answer to 2 decimal places, e.g. 32.16.)

    ________________________________________

    Question 9: (10 points)

    Statement of Cash Flows
    Some recent financial statements for Smolira Golf Corp. follow.

    SMOLIRA GOLF CORP.
    2006 and 2007 Balance Sheets
    Assets Liabilities and Owners' Equity
    2006 2007 2006 2007
    Current assets Current liabilities
    Cash $ 734 $ 815 Accounts payable $ 885 $ 1,163
    Accounts receivable 2,165 2,259 Notes payable 648 756
    Inventory 4,147 4,415 Other 95 169
    Total $ 7,046 $ 7,489 Total $ 1,628 $ 2,088
    Fixed assets Long-term debt $ 4,336 $ 4,463
    Net plant and equipment $ 13,648 $ 17,250
    Owners' equity
    Common stock and paid-in surplus $ 9,000 $ 9,000
    Retained earnings 5,730 9,188
    Total $ 14,730 $ 18,188
    Total assets $ 20,694 $ 24,739 Total $ 20,694 $ 24,739
    ________________________________________
    SMOLIRA GOLF CORP.
    2007 Income Statement
    Sales $ 30,150
    Costs of goods sold 17,073
    Depreciation 1,782
    Earnings before interest and taxes $ 11,295
    Interest paid 437
    Taxable Income $ 10,858
    Taxes (32 %) 3,475
    Net income $ 7,383
    Dividends $ 3,925
    Addition to retained earnings 3,458
    ________________________________________

    Required:
    Prepare the 2007 statement of cash flows for Smolira Golf Corp. (Amounts to be deducted should be indicated with a minus sign. Round your answer to the nearest whole dollar amount, e.g. 32.)

    SMOLIRA GOLF CORP.
    Statement of Cash Flows
    For 2007
    Cash, beginning of the year $

    Operating activities
    Net income $

    Plus:

    $

    Less:

    $

    $

    Net cash from operating activities $

    Investment activities

    $

    Net cash from investment activities $

    Financing activities

    $

    Net cash from financing activities

    Net increase in cash $

    Cash, end of year $

    ________________________________________
    Question 10: (8 points)

    Calculating Annuity Values
    If you deposit $1,100 at the end of each of the next 23 years into an account paying 8 percent interest, you will have $ in the account in 23 years. How much will you have if you make deposits for 46 years? $ (Round your answers to 2 decimal places, e.g. 32.16.)
    ________________________________________

    Calculating Total Cash Flows
    Bedrock Gravel Corp. shows the following information on its 2007 income statement: sales = $132,100; costs = $82,000; other expenses = $5,100; depreciation expense = $7,000; interest expense = $12,000; taxes = $8,060; dividends = $7,894. In addition, you're told that the firm issued $6,500 in new equity during 2007 and redeemed $6,500 in outstanding long-term debt.
    a. The 2007 operating cash flow is $ .

    b. The 2007 cash flow to creditors is $ .

    c. The 2007 cash flow to stockholders is $ .

    d. If net fixed assets increased by $5,100 during the year, the addition to NWC is $ .

    © BrainMass Inc. brainmass.com October 9, 2019, 10:00 pm ad1c9bdddf
    https://brainmass.com/business/finance/financial-ratios-for-just-dew-it-braam-fire-cash-flows-for-204846

    Attachments

    Solution Preview

    Question 7: (15 points)

    Calculating Financial Ratios
    Just Dew It Corporation reports the following balance sheet information for 2004 and 2005.

    JUST DEW IT CORPORATION
    2006 and 2007 Balance Sheets
    Assets Liabilities and Owners' Equity
    2006 2007 2006 2007
    Current assets Current liabilities
    Cash $ 10,800 $ 10,500 Accounts payable $ 58,500 $ 66,000
    Accounts receivable 27,900 28,000 Notes payable 41,750 41,000
    Inventory 64,500 61,300 Total $ 100,250 $ 107,000
    Total $ 103,200 $ 99,800 Long-term debt $ 56,600 $ 63,900
    Fixed assets Owners' equity
    Net plant and equipment $ 341,000 $ 335,000 Common stock and paid-in surplus $ 87,000 $ 87,000
    Retained earnings 200,350 176,900
    Total $ 287,350 $ 263,900
    Total assets $ 444,200 $ 434,800 Total liabilities and owners' equity $ 444,200 $ 434,800
    ________________________________________

    Based on the given balance sheets, calculate the following financial ratios for each year (Do not include the percent sign (%). Negative amount should be indicated by a minus sign. Round your answers to 2 decimal places, e.g. 32.16.):

    2006 2007
    a. Current ratio

    b. Quick ratio

    c. Cash ratio

    d. NWC to total assets ratio
    %
    %
    e. Debt-equity ratio

    Equity multiplier

    f. Total debt ratio

    Long-term debt ratio

    ________________________________________

    ________________________________________
    a. Current ratio = Current Assets/Current Liabilities
    2006 = 103,200/100,250 = 1.03
    2007 = 99,800/107,000 = 0.93
    b. Quick ratio = (Current Assets - Inventory)/Current Liabilities
    2006 = (103,200 - 64,500)/100,250 = 0.39
    2007 = (99,800 - 61,300)/107,000 = 0.36
    c. Cash ratio = Cash/Current Liabilities
    2006 = 10,800/100,250 = 0.11
    2007 = 10,500/107,000 = 0.10
    d. NWC to total assets ratio = (Current assets - Current liabilities)/Total assets
    2006 = (103,200 - ...

    Solution Summary

    This solution is comprised of a detailed explanation to calculate financial ratios for Just Dew It and Braam Fire, prepare the 2007 statement of cash flows for Smolira Golf Corp., compute how much will you have if you make deposits for 46 years, and calculate total cash flows for Bedrock Gravel Corp.

    $2.19