Finance Assignment

Answer Question 25 and 26 which you will find on Page 46 of your textbook Fundamentals of Corporate Finance. (10th edition)

Use the following information for problem 25 and 26 and assume the tax rate is 34%.

                                                2010                       2011

Sales                                       $11,573                 $12,936

Depreciation                            1,661                      1,736

Cost of goods sold                   3,979                      4,707

Other expenses                            946                         824

Interest                                         776                         926

Cash                                           6,067                      6,466

Accounts receivable                8,034                     9,427

Short-term notes payable      1,171                      1,147

Long-term debt                       20,320                                  24,696

Net fixed assets                       50,888                                  54,273

Account payable                      4,384                    4,644

Inventory                                 14,283                                  15,288

Dividends                                   1,411                     1,618

For Q25, draw up an income statement and balance sheet. Be sure to follow the format as outlined in the text and on the lecture.

For Q26, cite the formula for operating cash flow and then plug-in the correct numbers. For Q26, you need to submit only Operating Cash Flow, not all three cash flow measures.

After you have completed your income statement and balance sheet, compute the following financial ratios for both fiscal years:  1) current ratio; 2)quick ratio; 3)accounts receivable turnover; 4)inventory turnover; 5)debt to equity; 6)profit margin; 7)return on equity. For all ratios, cite the formula and then plug-in numbers. Show all your work, not just the final answer. Remember to compute ratios for both years!

Does this company appear to be a healthy company? Comment, and include financial numbers and ratios from your work, above, to support your answer which should be appx 2-3 paragraphs, single-spaced.