This is for ATC students only. Assignment for Financial Management.
From the scrambled list of items presented in Table 1, prepare an income statement and a balance sheet for Dooley Sportswear Company.
Financial Data for Dooley Sportswear, December 31, 1996
Long-term debt 300,000
Interest expense 5,000
Accumulated depreciation 442,500
Net sales (all credit) 1,500,000
Common stock 800,000
Accounts receivable 225,000
Operating expenses 525,000
Notes payable-current 187,500
Cost of goods sold 937,500
Plant and equipment 1,312,500
Accounts payable 168,750
Marketable securities 95,000
Prepaid insurance 80,000
Accrued wages 65,000
Retained earnings-current-year ?
Federal income taxes 5,750
Frank Zanca is considering three different investments that his broker has offered to him. The different cash flows are as follows:
|End of Year||A||B||C|
Because Frank has enough savings for only one investment, his broker has proposed the third alternative to be, according to his expertise, the best in town. However, Frank questions his broker and wants to eliminate the present value of each investment. Assuming a 15% discount rate, what is Frank’s best alternative?
Frog Hollow Bakery is a new firm specializing in all-natural-ingredient pastry products. In attempting to determine what the financial position of the firm should be, the financial manager obtained the following average ratios for the baking industry for 2004:
Common equity to total assets = 60%
Total asset turnover = 3 times
Long-term debt to total capitalization = 25%
Current ratio = 1.2
Quick ratio = .75
Average collection period (360-day year) = 10 days
Complete the accompanying pro forma balance sheet for Frog Hollow Bakery assuming 2005 sales (all credit) are $450,000.
Frog Hollow Bakery
Pro Forma Balance Sheet
December 31, 2005
Cash $ Current debt $
Accounts receivable Long-term debt
Total current assets Common equity
Fixed assets Total liabilities and equity $
Calculate the following financial ratios for the Hokie Corporation using the information given in Table 2 and 1996 information.
acid test ratio
long-term debt to total capitalization
return on total assets
return on common equity
Hokie Corporation Comparative Balance Sheet
For the Years Ending March 31, 1995 and 1996
(Millions of Dollars)
Assets 1995 1996
Cash $ 2 $ 10
Accounts receivable 16 10
Inventory 22 26
Total current assets $ 40 $ 46
Gross fixed assets: $120 $124
Less accumulated depreciation 60 64
Net fixed assets 60 60
Total assets $100 $106
Liabilities and Owners’ Equity
Accounts payable $ 16 $ 18
Notes payable 10 10
Total current liabilities $ 26 $ 28
Long-term debt 20 18
Common stock 40 40
Retained earnings 14 20
Total liabilities and owners’ equity $100 $106
Hokie had net income of $26 million for 1996 and paid total cash dividends of $20 million to their common stockholders.
What is the NPV of a $45,000 project that is expected to have an after-tax cash flow of $14,000 for the first two years, $10,000 for the next two years, and $8,000 for the fifth year? Use a 10% discount rate. Would you accept the project?
5 questions cukupla kot, kan?