Discussion Fw1

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Week1Self-Assessment.xlsx
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IS BS

Sales 250,000 ASSETS
less COGS (90,000) 2012 2013
Gross Profit 160,000 Current Assets
Other Op Revenue 5,000
Cash 1,200 1,400
Total Revenue 165,000 Temporary Investments
Inventories
Selling & Dist Expense Accounts receivable
Advertising (5,000) Prepaid expenses
PR (2,000) Other
Website (7,500)
Total Current Assets 1,200 1,400
Gen & Admin Expense
Electricity (1,500) Fixed Assets
Insurance (1,000)
Rent (30,000) Property, land and equipment
Payroll (46,500) Leasehold improvements
Equity and other long-term investments
Depreciation (10,000) Intangible assets
Less accumulated depreciation (Negative Value) - 300 - 195
Financial Expenses
Bad Debts (1,500) Total Assets - 300 - 195
Total Expenses (105,000) Other Assets
EBIT 60,000 Deferred income tax
Interest Expense (4,500) Charity/Goodwill
EBT 55,500 Other
Taxes @ 21% (11,655)
EAT 43,845 Total Other Assets - -
Cash Dividends 40,000 TOTAL ASSETS 900 1,205
Increase in Retained Earnings 3,845
LIABILITIES AND OWNER'S EQUITY
Current Liabilities
Accounts payable 350
Accrued wages and salaries
Accrued compensation 600
Short-term loans
Income taxes payable
Unearned revenue 300
Current portion of long-term debt
Total Current Liabilities 900 350
Long-Term Liabilities
Long-term debt
Other long-term debt
Total Long-Term Liabilities - -
Oner's Equity
Owner's investment 350
Accumulated retained earnings
Other
Total Owner's Equity - 350
TOTAL LIABILITIES AND OWNER'S EQUITY 900 700
FINANCIAL RATIOS
Working Capital (Current Assets - Current Liabilities) 300 1,050
Current Ration (Current Assets / Current Liabilities) 1.33 4.00
Quick Ratio ((Current Assets – Inventories) / Current Liabilities) 1.33 4.00
Debt-to-Equity Ratio (Total Liabilities / Shareholders Equity) - 0 1.00
Long Term Debt-to-Equity Ratio (Long Term Debt / Shareholders Equity) - 0 - 0

Practice Excercise 1.3

Alpha Project: $(000s)
Year 0 � $300 no discount = ($300.00)
Year 1 $100(1/1.10) or $100*(1.10)^-1 = $90.91
Year 2 $100(1/1.10)(1/1.10) or $100*(1.10)^-2 = $82.64
Year 3 $400(1/1.10)(1/1.10)(1/1.10) or 100*(1.10)^-3 = $300.53
Discounted net value = $174.08
Omega Project: $(000s)
Year 0 � $300 no discount = ($300.00)
Year 1 $300(1/1.10) = $272.73
Year 2 $150(1/1.10)(1/1.10) = $123.97
Year 3 $50(1/1.10)(1/1.10)(1/1.10) = $37.57
Discounted net value = $134.26

HW1B (DuPont)

Bridge, Inc. has a total asset turnover of 0.90 and a net profit margin of 4.28 percent. The total assets to equity ratio for the firm is 1.6. Calculate Vintage’s return on equity.
ROE = net profit margin X total asset turnover X total assets to equity ratio = 6.16%
TAT NPM A/E ROE
0.9 4.28 1.6 6.1632

HW1A Fin State

HW 1B Return on Investment HW 1C Operating Perfromance HW 1D Liquidity Ratios
Balance Sheet December 31, 20XX Return on Assets Basic Earning Power Return on Common Equity Avg Day's COGS Days of Sales in Inventory Avg Credit Sales/Day Days of Sales in Rec Current Ratio Acid-Test (Quick) Ratio Net Work Cap/Sales Ratio
0.2190 0.3791 0.3080 -7671.2329 -65.1786 10,958.90 27.38 2.94 1.32 0.15
Cash and marketable securities $100,000 Accounts payable  $200,000 HW 1A Financial Statements
Accounts receivable $300,000 Notes payable $50,000 EBIT Gross Profit IBT (EBT) NI Current Assets Shareholders Equity Net Work Cap Op After-Tax CF
Inventories $500,000 Accrued expenses $60,000 800,000 1,200,000 770,000 462,000 $910,000 $1,500,000 $600,000 592,000
Prepaid expenses $10,000 Total current liabilities $310,000
Total current assets $910,000 Long-term debt $300,000 HW 1D Profitability Ratios HW 1E Activity Ratios HW 1E Leverage Ratios
Gross fixed assets $1,600,000 Par value and paid-in-capital $200,000 Gross Profit Margin Op Profit Margin Net Profit Margin Inventory Turnover AR Turnover Total Asset Turnover Fixed Asset Turnover Debt/Assets Debt/Equity Times Interest Earned
Less: accumulated depreciation $400,000 Retained Earnings $1,300,000 0.3000 0.2000 0.1155 5.6000 13.3333 1.8957 3.3333333333 0.2891 0.4067 26.6667
Net fixed assets  $1,200,000 Common Equity 1,500,000
Total assets $2,110,000 Total liabilities and owner’s equity $2,110,000
Income Statement, Year of 20XX
Net sales (all credit) 4,000,000
Less: Cost of goods sold (2,800,000)
Gross Profit 1,200,000
Selling and administrative expenses (300,000)
Depreciation expense (100,000)
EBIT 800,000
Interest expense (30,000)
Earnings before taxes 770,000
Income taxes (308,000)
Net income  462,000

HW 1F Market Value Ratios

1
All Star Corp.'s stock price at the end of last year was $61.71. The company’s earnings per share for the last year were $10.56.  Calculate company’s P/E ratio.
P/E ratio = Price per share/Earnings per share =$61.71/ $10.56 = 5.84
Price EPS
61.71 10.56
P/E Ratio
5.84
2
Symphony Corp.'s stock price at the end of last year was $55.18, and the company’s book value per share was $25.33.  Calculate market/book ratio.
Round the answer to two decimal places.
Price EPS BVPS
Market/Book 55.18 25.33
2.178
3
Last year, Holland Tulip Inc. paid 59.51 million in common stock dividends. The company has 24.43 million shares outstanding. Calculate the firm's dividends per share ratio.
DPS = Common dividends paid/Number of Shares outstanding  = $59.51 million /24.43 million shares outstanding  = $2.44
Com Div Pd Shares Out
Div/Share 59.51 24.43
2.44
4
Serenade Corp.'s cash flow last year was $114.58 million. The company has 53.08 million shares outstanding.  What is the firm's cash flow per share ratio?
CF Shares Out
CF/Share 114.58 53.08
2.16
5
Yellow Iris Corp.'s net income last year was $359.13 million. The company has 49.90 million shares outstanding. What is the firm's EPS?
EPS = Net income/Number of shares outstanding =$359.13 million/49.90 million shares outstanding = $7.20
NI Shares Out
EPS 359.13 49.9
7.20
6
Rose Water Corp.'s net income last year was $330.01 million. The company has 69.45 million shares outstanding. The company’s stock price at the end of last year was $49.66. What is the firm's P/E ratio?
P/E ratio = Price per share/Earnings per share
Price NI Shares Out
EPS 49.66 330.01 69.45
10.45
7
Cardamom Corp.'s total common equity is $322.54 million. The company has 176.11 million shares outstanding. What is the firm's book value per share?
BVPS = Common equity/Number of Shares outstanding =$322.54 million/176.11 million shares outstanding = $1.83
CE Shares Out
BVPS 322.54 176.11
1.83
8
Black Dahlia Corp.'s stock price at the end of last year was $43.03. Black Dahlia Corp.'s total common equity is $117.42 million. The company has 8.44 million shares outstanding. What is the firm's market-to-book ratio?
Market/book ratio (M/B) = Price per share/BVPS
BVPS Stock Price CE Shares Out
13.91 43.03 117.42 8.44
M/B
3.09
3.09
9
Crab Feast Corp.'s cash flow last year was $100.14 million. The company has 7.57 million shares outstanding. Crab Feast Corp.'s stock price at the end of last year was $64.55.  What is the firm's price-to-cash flow ratio?
Price-to-cash flow ratio = Price per share /Cash flow per share
CF/Sh Stock Price CF Shares Out
13.2285336856 64.55 100.14 7.57
P/CF
4.87960
4.87960