1. To create a common size balance sheet, we divide each of the asset, liability, and equity account items by 2. Sawaya Company had depreciation and amortization expenses of $522,311, interest expenses of $114,077, and an EBITDA of $1,521,087 for the ye

1. To create a common size balance sheet, we divide each of the asset, liability, and equity account items by

total debt.

cost of goods sold.

sales.

total assets.

2. Sawaya Company had depreciation and amortization expenses of $522,311, interest expenses of $114,077, and an EBITDA of $1,521,087 for the year ended June 30, 2010. What is the Times Interest Earned for this company?

(a) .6 times

(b) 8.8 times

(d) None of these

3. Which one of the following statements is NOT true?

The accounts receivables turnover ratio measures how quickly the firm collects on its credit sales.

DSO measures in days, the time the firm takes to convert its receivables into cash.

One ratio that measures the efficiency of a firm's collection policy is days' sales outstanding.

The more days that it takes the firm to collect on its receivables, the more efficient the firm is.

4. Which one of the following is a criticism of equating the goals of maximizing the ROE of a firm and maximizing the firm's shareholder wealth?

ROE is based on after-tax earnings, not cash flows.

ROE does not consider risk.

ROE ignores the size of the initial investment as well as future cash flows.

All of these are criticisms of ROE as a goal.

5. Efficiency ratio: Jet, Inc., has net sales of $712,478 and accounts receivables of $167,435. What are the firm's accounts receivables turnover and days's sales outstanding?

0.24 times; 78.5 days

None of these

4.26 times; 85.7 days

5.2 times; 61.3 days

6. The following are the financial statements for Nederland Consumer Products Company for the fiscal year ended September 30, 2011.

Nederland Consumer Products Company Income Statement for the Fiscal Year Ended September 30, 2011
Net sales	$	63,291
Cost of goods sold		30,612
Gross margin	$	32,679
Marketing, research, administrative exp.		14,139
Depreciation		939
Operating income(loss)	$	17,601
Interest expense		483
Earnings(loss) before income taxes	$	17,118
Income taxes		5,280
Net earnings(loss)	$	11,838

Nederland Consumer Products Company Balance Sheet as of September 30, 2011
Assets:			Liabilities and Stockholder's Equity:
Cash and marketable securities	$	4,517	Accounts payable	$	3,547
Investment securities		440	Accrued and other liabilities		9,422
Accounts receivable		4,256	Taxes payable		2,228
Total inventories		5,388	Debt due within one year		6,366
Deferred income taxes		790
Prepaid expenses & other receivables		1,566
Total current assets	$	16,957	Total current liabilities	$	21,563
Property, plant, and equip., at cost		30,314	Long-term debt		12,314
Less: Accumulated depreciation		8,505	Deferred income taxes		1,831
Net plant and equipment	$	21,809	Other non-current liabilities		3,445
Net goodwill & other intangible assets		28,458	Total liabilities	$	39,153
Other non-current assets		2,239	Convertible Class A preferred stock		1,343
			Common stock		1,997
			Retained earnings		26,970
			Total stockholders’ equity (deficit)	$	30,310
Total assets	$	69,463	Total liabilities and stockholders’ equity	$	69,463

Calculate all the ratios, for which industry figures are available below, for Nederland and compare the firm’s ratios with the industry ratios. (Round current ratio, quick ratio, debt ratio, long term debt ratio answers to 2 decimal places, e.g. 12.25 and other answers to 1 decimal place, e.g.12.5 or 12.5%.)


Current Ratio						times
Quick Ratio						times
Gross margin						%
Net profit margin						%
Debt ratio						times
Long-term debt to equity						times
Interest coverage
ROA						%
ROE						%

9 years ago

Report issue

Answer for you

NOT RATED

Purchase the answer to view it

1.docx