Question
1) Use the following information to answer this question. Windswept, Inc. 2017 Income Statement ($ in millions) Net sales $ 10,800 Cost of goods sold
1)
Use the following information to answer this question.
Windswept, Inc. 2017 Income Statement ($ in millions) | |||
Net sales | $ | 10,800 | |
Cost of goods sold | 7,950 | ||
Depreciation | 420 | ||
Earnings before interest and taxes | $ | 2,430 | |
Interest paid | 100 | ||
Taxable income | $ | 2,330 | |
Taxes | 816 | ||
Net income | $ | 1,514 | |
Windswept, Inc. 2016 and 2017 Balance Sheets ($ in millions) | |||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||
Cash | $ | 280 | $ | 310 | Accounts payable | $ | 1,790 | $ | 1,842 | ||||
Accounts rec. | 1,110 | 1,010 | Long-term debt | 1,070 | 1,353 | ||||||||
Inventory | 2,000 | 1,745 | Common stock | 3,360 | 3,030 | ||||||||
Total | $ | 3,390 | $ | 3,065 | Retained earnings | 650 | 900 | ||||||
Net fixed assets | 3,480 | 4,060 | |||||||||||
Total assets | $ | 6,870 | $ | 7,125 | Total liab. & equity | $ | 6,870 | $ | 7,125 | ||||
What is the equity multiplier for 2017?
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2.35 times
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1.81 times
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1.34 times
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3.56 times
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2.75 times
2)
The 2017 balance sheet of Kerbers Tennis Shop, Inc., showed $2.25 million in long-term debt, $710,000 in the common stock account, and $6.1 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.45 million, $895,000, and $7.85 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $230,000. The company paid out $650,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $690,000, and the firm reduced its net working capital investment by $165,000, what was the firm's 2018 operating cash flow, or OCF? |
Multiple Choice
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$-1,730,000
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$2,585,000
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$-2,255,000
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$-4,080,000
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$-3,030,000
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