Question 1
The following are financial statements of Wildhorse Co..
|
| Net sales
| |
$2,234,400 |
| Cost of goods sold
| |
1,030,500 |
| Selling and administrative expenses
| |
920,400 |
| Interest expense
| |
96,100 |
| Income tax expense
| |
70,590 |
| Net income
| |
$ 116,810 |
|
| Assets
| |
|
| Current assets
| |
|
| Cash
| |
$ 76,000 |
| Debt investments
| |
85,590 |
| Accounts receivable (net)
| |
182,600 |
| Inventory
| |
155,000 |
| Total current assets
| |
499,190 |
| Plant assets (net)
| |
593,400 |
| Total assets
| |
$ 1,092,590 |
| Liabilities and Stockholders’ Equity
| |
|
| Current liabilities
| |
|
| Accounts payable
| |
$ 175,900 |
| Income taxes payable
| |
37,090 |
| Total current liabilities
| |
212,990 |
| Bonds payable
| |
212,800 |
| Total liabilities
| |
425,790 |
| Stockholders’ equity
| |
|
| Common stock
| |
368,100 |
| Retained earnings
| |
298,700 |
| Total stockholders’ equity
| |
666,800 |
| Total liabilities and stockholders’ equity
| |
$1,092,590 |
Additional information: The net cash provided by operating activities for 2017 was $206,700. The cash used for capital expenditures was $110,100. The cash used for dividends was $32,590. The weighted-average number of shares outstanding during the year was 50,000.
| (a)
| Compute the following values and ratios for 2017. (We provide the results from 2016 for comparative purposes.) (Round Current Ratio and Earnings per share to 2 decimal places, e.g. 15.25 and Debt to assets ratio to 1 decimal place, e.g. 78.9%. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) |
| (i)
| |
Working capital. (2016: $160,500) |
| (ii)
| |
Current ratio. (2016: 1.65:1) |
| (iii)
| |
Free cash flow. (2016: $48,700) |
| (iv)
| |
Debt to assets ratio. (2016: 31%) |
| (v)
| |
Earnings per share. (2016: $3.15) |
| (i)
| |
Working capital |
|
$ |
|
| (ii)
| |
Current ratio |
|
|
:1 |
| (iii)
| |
Free cash flow |
|
$ |
|
| (iv)
| |
Debt to assets ratio |
|
|
% |
| (v)
| |
Earnings per share |
|
$ |
|
Question 2
The following information is available for Marin Inc. for three recent fiscal years.
| |
|
2017 |
|
2016 |
|
2015 |
| Inventory
| |
$546,328 |
|
$571,700 |
|
$326,238 |
| Net sales
| |
1,934,372 |
|
1,695,980 |
|
1,327,594 |
| Cost of goods sold
| |
1,554,675 |
|
1,312,366 |
|
964,008 |
Calculate the inventory turnover, days in inventory, and gross profit rate for 2017 and 2016. (Round inventory turnover to 1 decimal place, e.g. 5.2, days in inventory to 0 decimal places, e.g. 125 and gross profit rate to 1 decimal place, e.g. 5.2%.)
| |
|
2017 |
|
2016 |
| Inventory Turnover
| |
|
times |
|
|
times |
| Days in Inventory
| |
|
days |
|
|
days |
| Gross Profit Rate
| |
|
% |
|
|
% |
| Question 3Suppose the following information was taken from the 2017 financial statements of FedEx Corporation, a major global transportation/delivery company.(in millions)20172016Accounts receivable (gross)$ 3,885$ 4,408Accounts receivable (net)3,2654,191Allowance for doubtful accounts620217Sales revenue38,27639,400Total current assets6,7097,068Answer each of the following questions.
| |
| |
HYPERLINK “javascript:void(0)” o “Collapse question part” (a)Your answer is correct. Calculate the accounts receivable turnover and the average collection period for 2017 for FedEx Corporation. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)Accounts receivable turnover timesThe average collection period for 2017 daysSHOW LIST OF ACCOUNTSSHOW SOLUTIONSHOW ANSWERLINK TO TEXTAttempts: 1 of 3 used |
|
| |
HYPERLINK “javascript:void(0)” o “Collapse question part” (b)Your answer is correct. Is accounts receivable a material component of the company’s total current assets? |
Question 4
Carla Vista Co. reports the following information (in millions) during a recent year: net sales, $10,040.0; net earnings, $320.0; total assets, ending, $4,550.0; and total assets, beginning, $5,475.0.
(a) Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin. (Round answers to 1 decimal place, e.g. 6.2% and 6.2.)
| 1.
| |
Return on assets |
|
|
% |
| 2.
| |
Asset turnover |
|
|
times |
| 3.
| |
Profit margin |
|
|
% |
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