[8:39 AM, 4/4/2021] Zeeshan (IU): QUESTION 1

Q1 Consider the given income statement and balance sheet and calculate the following ratios :

/5

Return on Assets Return on Equity Debt Ratio Current Ratio Write your comment about each of the ratios calculated what it describes.

Following are the Financial Statements of CSU CORPORATION for the year ended Dec. 31, 2020

Assets : 2019

Cash $1400

Accounts Receivable 4000

Supplies 1800

Equipment 16000

Total Assets $23,200

Liabilities and Shareholders Equity :

Liabilities :

Notes Payable $5000

Accounts Payable 2000

Stockholders Equity :

Common Stock 10000

Retained Earnings 6200

$23,200

Income Statement

Revenues $10600

Expenses $5200

Supplies expenses 1500

Rent Expense 900

Insurance Expense 50

Interest Expense 50

Depreciation Expense 40 (7740)

Net Income $2860

For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). [8:39 AM, 4/4/2021] Zeeshan (IU): QUESTION 2

Q2 The following table shows returns for several companies. /6

company 1

15%

company 2

11%

company 3

8%

company 4

7%

company 5

17%

company 6

-7%

company 7

-8%

company 8

13%

Company 9

12.5%

Company 10

10.5%

You have equal investment in all stocks. What would be your portfolio return? What benefit does it bring to you if you maintain a portfolio instead of making investment in single stock? Suppose you have investment as following weightage. Calculate portfolio beta

company 1

5%

company 2

10%

company 3

15%

company 4

6%

company 5

18%

company 6

7%

company 7

8%

company 8

15%

company 9

10%

company 10

6% [8:39 AM, 4/4/2021] Zeeshan (IU): QUESTION 3

Q3 Consider the following information related to stock returns of a company : /4

Year

Return

Probability

2016

15%

0.1

2017

11.5%

0.2

2018

12%

0.15

2019

13.75%

0.25

2020

10%

0.3

You are required to calculated the expected return of the above data. Also calculate the risk associated to relevant stock. Interpret your result through coefficient of variance.