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 |
| 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
| 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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