#30

The following information pertains to Montague Corporation:

Net Income $1,500,000 Preferred Dividends 250,000

Average Common Equity $18,000,000 Average Common Shares Outstanding 600,000

Calculate the return on common equity AND the earnings per share

#31

Red Corporation has $2,000,000 in total liabilities and 3,500,000 in total assets as of December 31, 2012. Of Red's Total liabilities, $350,000 is long-term

Calculate Red's debt to assets ratio and its long term debt to equity ratio.

#32

(a) Explain in your own words why a financial analyst would look at a company’s liquidity ratios. In other words, what does a liquidity ratio show about a company?

(b) Why might an analyst consider using one ratio over another? For example, why would an analyst rather consider the cash ratio over a company’s current ratio or quick ratio?

(c) What does a liquidity ratio over 1 illustrate?

(d) What does a liquidity ratio under 1 illustrate?

#33

At 12/31/11, Clark Corporation reported beginning net fixed assets of $94,150, ending net fixed assets of $103,626, accumulated depreciation of $49,133, net sales of $212,722, and depreciation expense of $12,315. Compute Clark Corporations(a)fixed asset turnover ratio AND(b)the average age of its fixed assets.(SHOW ALL WORK)

#34

NWA's Financial Statements contain the following information:

Cash $300,000Accounts Payable $500,000

Accounts Receivable $650,000Accrued Expenses $150,000

Inventory $800,000Long Term Debt $1,000,000

Marketable Securities $100,000

Required:

(1)What is the current Ratio

(2)What is the Quick Ratio

(3) What is the Cash Ratio

#35

ABC Corporation’s comparative balance sheets are presented below

2012 2011

Assets

Cash 28,200 17,700

Accounts Receivable 24,200 22,300

Investments 23,000 16,000

Equipment 60,000 70,000

Accumulated Depreciation–Equip (14,000) (10,000)

Total Assets 121,400 116,000

Liabilities and Owners’ Equity

Accounts Payable 19,600 11,100

Bonds Payable 10,000 30,000

Common Stock 60,000 45,000

Retained Earnings 31,800 29,900

Total Liabilities and Owners’ Equity 121,400 116,000

Additional information:

1. Net income was $28,300. Dividends declared and paid were $26,400.

2. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $4,300

3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation.

Instructions

Prepare a statement of cash flows for 2012 using the indirect method. (SHOW ALL WORK)