week 3 H-380-3-Homework

30 Sep No Comments

Problem 2-5A

The following are financial statements of Bramble Corp..

Net sales   $2,231,500    
Cost of goods sold   1,027,800
Selling and administrative expenses   918,600
Interest expense   90,600
Income tax expense   70,170
Net income   $ 124,330
Assets    
Current assets    
  Cash   $ 73,100
  Debt investments   85,170
  Accounts receivable (net)   189,700
  Inventory   164,200
   Total current assets   512,170
Plant assets (net)   590,700
Total assets   $ 1,102,870
Liabilities and Stockholders’ Equity    
Current liabilities    
  Accounts payable   $ 173,000
  Income taxes payable   36,670
   Total current liabilities   209,670
Bonds payable   219,900
   Total liabilities   429,570
Stockholders’ equity    
  Common stock   365,400
  Retained earnings   307,900
   Total stockholders’ equity   673,300
Total liabilities and stockholders’ equity   $1,102,870

Additional information: The net cash provided by operating activities for 2017 was $203,800. The cash used for capital expenditures was $107,400. The cash used for dividends was $32,170. 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   $  

Exercise 6-12

The following information is available for Pharoah Company for three recent fiscal years.

    2017   2016   2015
Inventory   $552,440   $569,374   $337,484
Net sales   1,955,006   1,692,420   1,322,224
Cost of goods sold   1,532,544   1,277,699   936,594

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     %     %

Exercise 8-14 (Part Level Submission)

Suppose the following information was taken from the 2017 financial statements of FedEx Corporation, a major global transportation/delivery company.

(in millions)   2017   2016
Accounts receivable (gross)   $ 3,408   $ 4,611
Accounts receivable (net)   3,144   4,284
Allowance for doubtful accounts   264   327
Sales revenue   32,081   35,794
Total current assets   6,739   6,864

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      times
The average collection period for 2017      days

(b)

  Your answer is correct.
   

Is accounts receivable a material component of the company’s total current assets? 

Exercise 9-17

Crane Company reports the following information (in millions) during a recent year: net sales, $10,185.0; net earnings, $250.0; total assets, ending, $5,130.0; and total assets, beginning, $5,150.0.

(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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