Given the information below for Pamplin Inc.,: a. How much is the firm's net working capital, and
Question:
Given the information below for Pamplin Inc.,:
a. How much is the firm's net working capital, and what is the debt ratio for 2014 and 2015?
b. Complete a common-sized income statement, a common-sized balance sheet, and a statement of cash flows for 2015. Interpret your results.
Pamplin, Inc. Balance Sheet at 12/31/2014 and 12/31/2015
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Assets Cash Accounts recevable Inventory Current assets 2014 $ 200 450 2015 150 425 625 $1.200 $1,200 2015 $2,600 (1,200) 2014 Plant and equipment Less accumulated depreciation Net plant and equipment Total assets (1,000) Liabilities and Owners' Equity 2014 2015 200 Accounts payable Notes payable-current (9%) Current liabilities Bonds Owners' equity s 150 Common stock 900 900 Retained earnings Total owners equity Total liabilities and owners' equity 2014 1,200 700 $500 2015 $1,450 Sales Cost of goods sold Gross profit Selling, general, and administrative expenses Depreciation expense Operating income Interest expense Net income before taxes Taxes (40%) Net income S 600 220 250 250 200 240 360 64 296 118 178 s 200 120
Step by Step Answer:
Given data Assets 2011 2012 Cash 200 150 Accounts Receivable 450 425 Inventory 550 625 Current assets 1200 1200 Plant and equipment 2200 2600 Less acc...View the full answer
Foundations Of Finance
ISBN: 9780134083285
9th Edition
Authors: Arthur J. Keown, John H. Martin, J. William Petty
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
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