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# Prepare a balance sheet, income statement, cash flows, TVM

See attached file for proper format.

Consider the following financial data for a company (all figures in thousands of dollars except stock price and # of shares):

Balance Sheet Data 12/31/2010 12/31/2009
Cash & Equivalents 500 100
Accounts Receivable 220 200
Inventories 1,000 1,100

Total Fixed Assets 10,750 10,000
Accumulated Depreciation 6,150 6,000
Net Fixed Assets 4,600 4,000

Accounts Payable 400 350
Accruals 70 100
Notes Payable (<1 year) 1,200 1,000
Long Term Debt 2,000 1,700

Common Stock 1,000 1,000
Retained Earnings 1,250

Stock price \$30.00 \$25.00
# of shares 100,000 100,000

Income Statement Data (2010)

Sales 10,000
Operating expenses excluding depreciation 7,500

Interest expense 120
Income taxes paid 830

Dividends paid 1,000

Construct a complete balance sheet for end of 2009 and 2010, a complete 2010 income statement, and a complete 2010 statement of cash flows. Also, calculate free cash flow for 2010.

1. Compute the following ratios for the financial statements above (use
12/31/2010 balance sheet ratios):
Return on Sales (ROS)
Return on Assets (ROA)
Return on Equity (ROE)
Inventory Turnover
Receivables Turnover
Asset Turnover
Debt
Times interest earned
Current
Quick (acid test)
Market Value
Price to earnings (P/E)
Market to book

2. Solve the following TVM problems (you may use formulas, a calculator, or Microsoft Excel):
a. How much would I need to deposit today in an account earning 10% per year in order to accumulate \$10,000 after 5 years? What if my interest was compounded monthly?
b. If I deposit \$100 in an account earning 10% per year, how much will my deposit be worth after 5 years? What if we had the same problem but interest is compounded monthly?
c. How much would I have in my retirement account if I deposited \$2000 each year for 35 years and I earned 10% on my savings? What about \$4,000? Instead, what if I made
monthly deposits of \$166.67? How about monthly deposits of \$333.33?
d. How much could I afford to borrow for a home if I can make monthly payments of
\$12,000 per year for 30 years at 8%? What about monthly payment of \$1,000? What if I
wanted to know what my monthly payments would be a \$20,000 car loan over five years
at 8%?

#### Solution Preview

Your tutorial is in Excel. There is a tab for the financial statements, a tab for the ratios and a tab for the time ...

#### Solution Summary

Your tutorial is in Excel. There is a tab for the financial statements, a tab for the ratios and a tab for the time value of money problems. The numerator and denominator for the ratios are shown so you can see how to do these. The TVM problems give you the data so you can reproduce the amounts in a calculator (if you wish). The financial statements include an income statement, a statement of changes in RE, a classified balance sheet and a cash flow statement.

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