HCS 380 week 3

30 Sep No Comments

Question 1

  Your answer is correct.

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
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

  Your answer is correct.

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

  Your answer is correct.

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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