strayer fin100 week 8 and week 9 homework

week 8 homework

3. Use your knowledge of balance sheets to fill in the missing amounts:

ASSETS
Cash $ 50,000
Accounts receivable 80,000
Inventory 100,000
Total current assets
Gross plant and equipment
Less: accumulated depreciation 130,000
Net plant and equipment 600,000
Total assets

LIABILITIES Accounts payable $ 12,000
Notes payable 50,000
Total current liabilities
Long- term debt
Total liabilities
Common stock ($ 1 par, 100,000 shares)
Paid- in capital 250,000
Retained earnings 200,000
Total stockholders’ equity
Total liabilities and equity $ 830,000

4. Use your knowledge of balance sheets and common- size statements to fill in the missing dollar amounts:

ASSETS
Cash $ 25,000 3.4%
Accounts receivable $ 125,000
Inventory 27.1%
Total current assets $ 350,000
Gross plant and equipment 95.0%
Less: accumulated depreciation $ 313,000 42.5%
Net plant and equipment
Total assets $ 737,000 100.0%

LIABILITIES
Accounts payable 15.7%
Notes payable $ 29,000 3.9%
Total current liabilities
Long- term debt $ 248,000 33.6%
Total liabilities $ 393,000
Common stock ($. 01 par, 450,000 shares) $ 4,500 0.6%
Paid- in capital $ 220,500 29.9%
Retained earnings
Total stockholders’ equity $ 344,000 46.7%
Total liabilities and equity 100.0%

6. Use the following information to construct an income statement:

Interest $ 25,000
Sales $ 950,000
Income tax rate 25%
Selling and marketing expenses $ 160,000
General and administrative expenses $ 200,000
Gross profit $ 550,000
Depreciation $ 30,000
Cost of goods sold $ 400,000

Chapter 14

3. The Dayco Manufacturing Company had the following financial statement results for last year. Net sales were $ 1.2 million with net income of $ 90,000. Total assets at year end amounted to $ 900,000.

a. Calculate Dayco’s asset turnover ratio and its profit margin.
b. Show how the two ratios in Part ( a) can be used to determine Dayco’s rate of return on assets.
c. Dayco operates industry average ratios are these: Return on assets: 11 percent; Asset turnover: 2.5 times; Net profit margin: 3.6 percent. Compare Dayco’s performance against the industry averages.

5. Following are selected financial data in thousands of dollars for the Hunter Corporation.

a. Calculate Hunter’s rate of return on total assets in 2012 and in 2011. Did the ratio improve or worsen?

b. Diagram the expanded Du Pont system for Hunter for 2012. Insert the appropriate dollar amounts wherever possible.

c. Use the Du Pont system to calculate the return on assets for the two years, and determine why they changed.

6. Following are financial statements for the Genatron Manufacturing Corporation for 2012 and 2011.

a. Apply Du Pont analysis to both the 2012 and 2011 financial statements’ data.

b. Explain how financial performance differed between 2012 and 2011.

Week 9 Homework Chapter 15

P1. Pretty Lady Cosmetics Products has an average production process time of forty days. Finished goods are kept on hand for 15 days before they are sold. Accounts receivable are outstanding an average of thirty five days and the firm receives forty days of credit on its purchasers from suppliers.

a. Estimate the average length of the firm’s short-term operating cycle. How often would the cycle turn over in a year?

b. Assume net sales of $1,200,000 and cost of goods sold of $900,000. Determine the average investments in accounts receivable, inventories, and accounts payable. What would be the net financing need considering only these three accounts?

P4. Suppose the Robinson company had a cost of goods sold at $1,000,000 in 2010 and $1,200,000 in 2011.

a. Calculate the inventory turnover for each year. Comment on your findings.

b. What would have been the amount of inventories in 2011 if the 2010 turnover ratio had been maintained?

P5. Given Robinson’s 2010 and 2011 financial information presented in problems 2 and 4,

a. Compute its operating and cash conversion cycle in each year.

b. What was Robinson’s net investment in working capital year?

Chapter 16

P3. Obtain an current issue of the Federal Reserve Bulletin or review a copy from the Fed’s Web site (http://www.federalreserve.gov.) or the St. Louis Fed’s web site (http://.www.stlouisfed.org), and determine the changes in the prime rate that have occurred since the end of 2000. Comment on any

P4. Commute the effective cost of not taking the cash discount under the following trade credit terms:

P5. What conclusion can you make about credit terms from reviewing your answers to Problem 4?