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    Financial management with key ratio analysis

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    FINC 330 Graded Exercise 1 (Issued 06/02/08 due-06/08/08)

    Using the attached Delta, Incorporated Financial Statements complete the following worksheet to provide the requested key financial ratios and information for FY 2008 - only. Type your work in the table provided, following the example given, and then rename this file (Prob1-xyz where xyz are your initials) and submit as a word attachment to your WebTycho Student Assignments - Graded Problem -1.

    # Financial
    Ratio Formula Computation Answer
    Ex Current ratio
    Current assets/Current Liabilities $1200/$300 4.0
    1 Acid test ratio

    2 Average collection
    period

    3 Operating profit margin

    4 Inventory turnover

    5 Return on common equity

    6 Debt ratio

    7 Times interest earned

    Financial
    Information Formula Computation Answer
    8 Operating Income

    9 Total liabilities

    10 Net Working capital

    Delta Incorporated
    Balance Sheets
    ( $in 000's)
    2007 2008

    Cash $ 200 $ 150
    Accounts receivable $ 450 $ 425
    Inventories $ 550 $ 625
    Total current assets $ 1,200 $ 1,200

    Plant and equipment $ 2,200 $ 2,600
    Less: Accumulated depreciation $ 1,000 $ 1,200
    Net plant and equipment $ 1,200 $ 1,400
    Total Assets $ 2,400 $ 2,600

    Accounts Payable $ 200 $ 150
    Notes payable-current (9%) $ - $ 150
    Total current liabilities $ 200 $ 300
    Bonds (8 1/3%) $ 600 $ 600
    Common Stock $ 300 $ 300
    Retained earnings $ 1,300 $ 1,400
    Total Liabilities & Common Equity $ 2,400 $ 2,600

    Delta Incorporated
    Income Statements
    ( $in 000's)
    2007 2008

    Sales $ 1,200 * $ 1,450 *
    Cost of Goods sold $ 700 $ 850
    Gross margin $ 500 $ 600
    Operating expense:
    Selling expense $ 20 $ 25
    General & administrative $ 10- $ 15
    Depreciation $ 220 $ 200
    Total operating expense $ 250 $ 240
    Net Operating Income $ 250 $ 360
    Interest expense $ 50 $ 64
    Net Income before taxes $ 200 $ 296
    Taxes (40%) $ 80 $ 118
    Net Income $ 120 $ 178

    * All sales are on account.

    See the attached problem of financial information of Delta Incorporated with a table of key ratios to be completed.

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    FINC 330 Graded Exercise 1 (Issued 06/02/08 due-06/08/08)

    Using the attached Delta, Incorporated Financial Statements complete the following worksheet to provide the requested key financial ratios and information for FY 2008 - only. Type your work in the table provided, following the example given, and then rename this file (Prob1-xyz where xyz are your initials) and submit as a word attachment to your WebTycho Student Assignments - Graded Problem -1.

    # Financial
    Ratio Formula Computation Answer
    Ex Current ratio
    Current assets/Current Liabilities $1200/$300 4.0
    1 Acid test ratio

    2 Average collection
    period

    3 Operating profit margin

    4 Inventory turnover

    5 Return on common ...

    Solution Summary

    This explains the steps for Financial management with key ratio analysis by taking Delta as an example

    $2.19

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