Homeworks

The 2020 balance sheet of Osaka's Tennis Shop, Incorporated, showed long-term debt of $2.7 million, and the 2021 balance sheet showed long-term debt of $2.9 million. The 2021 income statement showed an interest expense of $95,000. What was the firm's cash flow to creditors during 2021?

$-105,000

The 2020 balance sheet of Dugan, Incorporated, showed current assets of $2,915 and current liabilities of $1,415. The 2021 balance sheet showed current assets of $2,900 and current liabilities of $1,575. What was the company's 2021 change in net working capital, or NWC?

$-175

Wallace Driving School's 2020 balance sheet showed net fixed assets of $5.4 million, and the 2021 balance sheet showed net fixed assets of $6 million. The company's 2021 income statement showed a depreciation expense of $425,000. What was net capital spending for 2021?

$1,025,000

Prepare a 2018 balance sheet for Rogers Corporation based on the following information: Cash = $300,000; Patents and copyrights = $790,000; Accounts payable = $370,000; Accounts receivable = $159,000; Tangible net fixed assets = $3,200,000; Inventory = $255,000; Notes payable = $180,000; Accumulated retained earnings = $1,295,000; Long-term debt = $1,730,000. What is the common stock account balance for the company?

$1,129,000

The 2020 balance sheet of Osaka's Tennis Shop, Incorporated, showed long-term debt of $6 million, and the 2021 balance sheet showed long-term debt of $6.2 million. The 2021 income statement showed an interest expense of $205,000. During 2021, the company had a cash flow to creditors of $5,000 and the cash flow to stockholders for the year was $60,000. Suppose you also know that the firm's net capital spending for 2021 was $1.45 million and that the firm reduced its net working capital investment by $85,000. What was the firm's 2021 operating cash flow, or OCF?

$1,430,000

Griffin's Goat Farm, Incorporated, has sales of $584,000, costs of $295,000, depreciation expense of $40,000, interest expense of $25,000, and a tax rate of 24 percent. What is the net income for this firm?

$170,240

The 2020 balance sheet of Osaka's Tennis Shop, Incorporated, showed $630,000 in the common stock account and $4.9 million in the additional paid-in surplus account. The 2021 balance sheet showed $670,000 and $5.4 million in the same two accounts, respectively. If the company paid out $620,000 in cash dividends during 2021, what was the cash flow to stockholders for the year?

$80,000

Jackson Corporation has a profit margin of 5.8 percent, total asset turnover of 1.7, and ROE of 20.34 percent. What is this firm's debt-equity ratio?

1.06

If Rogers, Incorporated, has an equity multiplier of 1.56, total asset turnover of 1.70, and a profit margin of 6.6 percent, what is its ROE?

17.50%

A company has net income of $199,000, a profit margin of 7.8 percent, and an accounts receivable balance of $138,370. Assuming 75 percent of sales are on credit, what is the company's days' sales in receivables?

26.39

Dexter, Incorporated, had a cost of goods sold of $44,421. At the end of the year, the accounts payable balance was $8,443. How long on average did it take the company to pay off its suppliers during the year?

69.37

Which one of the following questions involves a capital structure decision?

How much debt should the firm incur to fund a project?

Which one of the following is least apt to help convince managers to work in the best interest of the stockholders? Assume there are no golden parachutes.

Increasing managers' base salaries

Which one of the following is a primary market transaction? Multiple Choice Sale of currently outstanding stock by a dealer to an individual investor Sale of a new share of stock from a corporation to an individual investorCorrect Transfer of stock ownership from one shareholder to another shareholder Gift of stock from one shareholder to a previous non-shareholder Repurchase of stock by a corporation from a shareholder

Sale of a new share of stock from a corporation to an individual investor

Symone sold shares of Naraghi Corporation stock to Aleena. The stock is listed on the NYSE. This trade occurred in which one of the following?

Secondary, auction market

Which one of the following questions involves a capital budgeting decision?

Should the firm purchase a new machine for the production line?

Denver, Incorporated, has sales of $15 million, total assets of $12.6 million, and total debt of $5.6 million. Assume the profit margin is 8 percent. a. What is the company's net income? b. What is the company's ROA? c. What is the company's ROE?

a. $1,200,000 b. 9.52 c. 17.14

Bishop, Incorporated, is obligated to pay its creditors $8,700 during the year. a. What is the market value of the shareholders' equity if assets have a market value of $9,100? b. What if assets equal $6,700?

a. $400 b. 0

Nightwish Corporation shows the following information on its 2021 income statement: Sales = $251,000; Costs = $156,000; Other expenses = $7,900; Depreciation expense = $18,400; Interest expense = $14,400; Taxes = $19,005; Dividends = $11,500. In addition, you're told that the firm issued $5,900 in new equity during 2021 and redeemed $4,400 in outstanding long-term debt. a.What is the 2021 operating cash flow? b.What is the 2021 cash flow to creditors? c.What is the 2021 cash flow to stockholders? d.If net fixed assets increased by $25,000 during the year, what was the addition to NWC?

a. $68,095 b. $18,800 c. $5,600 d. $295

Wims, Incorporated, has current assets of $5,000, net fixed assets of $16,500, current liabilities of $4,500, and long-term debt of $7,600. a. What is the value of the shareholders' equity account for this firm? b. How much is net working capital?

a. $9400 b. $500

Mobius, Incorporated, has a total debt ratio of .43. a. What is its debt-equity ratio? b. What is its equity multiplier?

a. 0.75 b. 1.75

SDJ, Incorporated, has net working capital of $3,320, current liabilities of $4,550, and inventory of $4,600. a. What is the current ratio? b. What is the quick ratio?

a. 1.73 b. 0.72

Dahlia Corporation has a current accounts receivable balance of $332,875. Credit sales for the year just ended were $4,207,540. a. What is the company's receivables turnover? b. What is the company's days' sales in receivables? c. How long did it take on average for credit customers to pay off their accounts during the past year?

a. 12.64 b. 28.88 c. 28.88

Bolton Corporation had additions to retained earnings for the year just ended of $553,000. The firm paid out $191,000 in cash dividends, and it has ending total equity of $4.96 million. The company currently has 240,000 shares of common stock outstanding. a. What are earnings per share? b. What are dividends per share? c. What is the book value per share? d. If the stock currently sells for $75 per share, what is the market-to-book ratio? e. What is the price-earnings ratio? f. If the company had sales of $7.56 million, what is the price-sales ratio?

a. 3.10 b. 0.80 c. 20.67 d. 3.63 e. 24.19 f. 2.38

The Top Corporation has ending inventory of $483,565, and cost of goods sold for the year just ended was $4,448,798. a. What is the inventory turnover? b. What is the days' sales in inventory? c. How long on average did a unit of inventory sit on the shelf before it was sold?

a. 9.20 b. 39.67 c. 39.67

Determining the number of shares of stock to issue is an example of a ______ decision.

capital structure

A business that is a legal entity separate from the owners, yet treated as a legal person, is called a(n):

corporation.

A firm owned by two or more people who each have unlimited liability for all of the firm's debts is called a:

general partnership.

Which one of the following actions by a financial manager is most apt to create an agency problem?

increasing current profits when doing so lowers the value of the company's equity

A general partner:

is personally responsible for 100 percent of the debts of the partnership.

Eduardo sold 500 shares of Northcutt Corporation stock on the New York Stock Exchange. This transaction:

occurred in the secondary market.

Financial managers should primarily focus on the interests of:

shareholders.

A firm owned by a single person who has unlimited liability for the firm's debt is called a:

sole proprietorship.