Your boss is looking at different investments to expand their services. He is looking at figures...
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Your boss is looking at different investments to expand their services. He is looking at figures for CarStop, a company that has had a lot of news attention due to its high volume of trades. He shows you a copy of the most recent balance sheet. Assets Bank Accounts Receivable Merchandise Inventory Plants and Equipment Total Assets CarStop BALANCE SHEET December 31, 2020 $5,000.00 40,000.00 75,000.00 500,000.00 $620,000.00 Liabilities Bank Loan Accounts Payable Shareholder's Equity Capital Stock 25000 Common Shares Retained Earnings Total Liabilities and Equities 1. How much equity was generated by company profits? $150,000.00 50,000.00 200,000.00 25,000.00 250.000.00 170,000.00 $620.000.00 2. How much equity was raised by the sale of common shares for CarStop? 3. Assuming that all shares were (initially) sold for the same price, what was the sale price for one share? 4. Should the boss invest in this company? (i.e. Is this company in a good position to pay out dividends?) Explain. 5. The boss is looking to purchase either DEF Company or GHI Company. He asked you last-minute for your opinion. What are the top 5 ratios that you would look at when comparing these companies? Why? Your boss is looking at different investments to expand their services. He is looking at figures for CarStop, a company that has had a lot of news attention due to its high volume of trades. He shows you a copy of the most recent balance sheet. Assets Bank Accounts Receivable Merchandise Inventory Plants and Equipment Total Assets CarStop BALANCE SHEET December 31, 2020 $5,000.00 40,000.00 75,000.00 500,000.00 $620,000.00 Liabilities Bank Loan Accounts Payable Shareholder's Equity Capital Stock 25000 Common Shares Retained Earnings Total Liabilities and Equities 1. How much equity was generated by company profits? $150,000.00 50,000.00 200,000.00 25,000.00 250.000.00 170,000.00 $620.000.00 2. How much equity was raised by the sale of common shares for CarStop? 3. Assuming that all shares were (initially) sold for the same price, what was the sale price for one share? 4. Should the boss invest in this company? (i.e. Is this company in a good position to pay out dividends?) Explain. 5. The boss is looking to purchase either DEF Company or GHI Company. He asked you last-minute for your opinion. What are the top 5 ratios that you would look at when comparing these companies? Why?
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Answer rating: 100% (QA)
Determine how much equity was generated by company profits Retained Earnings Shareholders Equity Capital Stock Retained Earnings 25000000 2500000 Retained Earnings 22500000 Therefore 22500000 of equit... View the full answer
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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