A company has the following accounts: cash ($25,000), net income ($50,000) interest income ($12,000), accounts payable ($75,000), factory ($85,000), equity ($305,000), inventory ($75,000), and accounts receivable ($6,000). What is the current ratio for the company? Show your calculations. What is the return on equity? Sho
Constant-Growth Model. Here are data on two stocks, both of which have discount rates of 15 percent Stock A Stock B Return on equity 15% 10% Earnings per share $2.00 $1.50 Dividends per share $1.00 $1.00 What are the divi
Thorpe Corporation sells products for $15 each that have variable costs of $10 per unit. Thorpe's annual fixed cost is $300,000. User the per unit contribution margin approach to determine the break-even point in units and dollars.
Icon Industries is considering a new product for its Trophy Division. The product, which would feature an alligator, is expected to have global market appeal and to become the mascot for many high school and university athletic teams. Expected variable unit costs are as follows: direct materials, $18.50; direct labor, $4.25; pro
RE:"-If the firm was to the right of the curve or positive from the break even point means that fixed costs are high and variable costs are low." RE:"-If the firm is to the left or negative it means they have low fixed costs and higher variable costs Does moving to the right (or left) of the BE point cause variable costs
C-V-P Analysis The Last Outpost is a tourist stop in a western resort community. Kerry Yost, the owner of the shop, sells hand-woven blankets for an average price of $30 per blanket. Kerry buys the blankets from weavers at an average cost of $21. In addition, he has selling expenses of $3 per blanket. Kerry rents the building
Problem 22-2A: CVP analysis and charting L.O. P2, P3 Xcite Equipment Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other
(Investment) ratio of 12 percent. If the debt-to-total-assets ratio is 40 percent, what is the return on equity? If the firm had no debt, what would the return-on-equity ratio be?
1. Determine the change in market price of the capital stock from the end of 20X1 to the end of 20X3. 2. What are the total assets at the end of each year? 3. What is the return on owners' equity for 20X3? (Hint: A=L+E) For this question, assume that the total owners' equity did not change during the year. See attached file
Compute the specific ratios using Kale Company's balance sheet at December 31, 2004. Assets Cash 15,000 Marketable Securites 8,000 Accounts Receivable 13,000 Inventory 11,000 Property and Equipment 1
I would like for you to reference the www.sec.gov and choose. (Targets Stores). Calculate the basic Inventory Ratios...Days sales in inventory and inventory turnover. Have these ratios been improving or deteriorating? Based on the reading of the 10k what strategies are employed by your respective company in managing inventory
7-10 slides Details: Put together a slide presentation for familiarizing staff with the current condition of the company. Those attending your presentation will include some who are less familiar with the use of financial ratios. Use the following financial statements for ALLGR Manufacturing to derive important financial rati
Describe how Sensitivity Analyses interact with Break-even Analyses.
Lucido Products markets two computer games: Claimjumper and makeover. A contribution format income statement for a recent month for the two games appears below: Claimjumper Makeover Total Sales $30,000 $70,000 $100,000 Less variable expenses 20,000 50,000 70,000 Contribution margin $10,000 $20,000 30,000 Less fixed exp
If a firm has a break-even point of 20,000 units and the contribution margin on the firm's single product is $3.00 per unit and fixed costs are $60,000, what will the firm's net income be with sales of 30,000 units?
A Company has the following data: Assets: $10,000; Profit margin: 3.0%; Tax rate: 40%; Debt ratio: 60.0%; Interest rate: 10.0%; and Total assets turnover: 2.0. What is the Company's TIE ratio?
You have taken the following information from a firm's financial statements. As an investor in the firm's debt instruments, you are concerned with its liquidity position and its use of financial leverage. What conclusions can you draw from this information? 2004 2003 2002 Sales $1,700,000 $1,500,000 1,000,000 Ca
ABC Company had 100,000 shares of common stock and 20,000 shares of preferred stock at the end of the year just completed. Preferred stockholders received dividends totaling $140,000. Common stockholders received dividends totaling $210,000. If the dividend payout ratio for the year was 70%, then the net income for the year was:
Sales (30,000 basket balls at $50) 1,500,000 less Variable Expenses 900,000 Contribution margin 600,000 Less fixed Expenses 280,000 Net income 320,000 Compute the company's contribution margin percentage and break even point in both units and
1. Why is interest expense said to cost the firm substantially less than the actual expense, while dividends cost it 100 percent of the outlay? 2. If the accounts receivable turnover ratio is decreasing, what will be happening to the average collection period? 3. Griffey Junior Wear, Inc. has $800,000 in assets and $200,00
NuWell Trading Ltd. a) Calculate 1. Current ratio 2. Inventory turnover 3. Interest Cover Ratio 4. Return on Ordinary shareholders' equity 5. Earnings per ordinary share 6. Price/earning ratio b) Based on the ratios computed, comment on NuWell's financial position and the attractiveness of its ordinary shares to investors.
Assuming that the current ratio is currently 2, which of the following actions will increase it? 1. Purchasing inventory with cash. 2. Purchasing inventory on short-term credit. 3. Paying off a short-term bank loan with long-term debt. 4. None of the above increase the current ratio. 5. All of
Walker machine tools has 5 million shares of common stock outstanding. The current market price of Walker common stock is $42 per share rights-on. The company's net income this year is $15 million. A rights offering has been announced in which 500,000 new shares will be sold at $36.50 per share. The subscription price plus 10 ri
See attached file. 1. Compare and contrast standards and budgets. 2. Compute the variable overhead total, spending and efficiency variances for manufacturing overhead given the following information. Actual hours x1000, standard hours 900, standard rate $1.5/hours and actual rate $1.25/hour. 3. Given the following info
Carter's corporation sales are expected to increase from 5 million in 05 to 6 million in 06 or by 20%. Its assets totaled 3 million at the end of 05. Carter is at full capacity so its assets must grow in proportion to projected sales. At the end of 05, current liabilities are 1 million, consisting of 250,000 of accounts payabl
Indicate for each of the following items whether it would appear on a balance sheet (BS) or an income statement (IS). If a balance sheet item, is it an asset (A), a liability (L), or an owners' equity item (OE)? Assuming no additional investments by or distributions to owners, compute the missing amounts for companies X, Y
As the manager of Losen division of McCarthy Corporation, you are interested in determining the division's return on investment. As division manager you have no control over financing assets, but you control acquisition and disposition of assets. The division controller has given you the following data to aid you in calculatin
If your firm has a debt issue outstanding with 7 years to maturity at 87 percent of face value paying semi-annually at 6.5%, what is the cost of debt? Assume a 35% tax rate. Is there a debt to equity ratio that will maximize the value of the firm? Why or why not?
Andy has five barbers working for him. Each Barber is paid $9.90/hr & works 40/hr week & a 50/wk year regardless of # of haircuts. Rent & other fixed expenses are $1750 per month. Hair shampoo used on all clients costs .40 per client. Assuming they are on ly doing haircuts the unit price is $12. 1 Find contribution margin per
University Catering sells 50-pound bags of popcorn to university dormitories for $10 a bag. The fixed costs of this operation are $80,000, while the variable costs of the popcorn are $.10 per pound. a. What is the break-even point in bags? b. Calculate the profit or loss on 12,000 bags and on 25,000 bags. c. What is the deg