Atle Inc. has reported its audited financial statements for the year-end 2018 in Table 1. Table 1: Auditied Balance Sheet for 2018 YE Audited Dec 31, 2018 195 200 1,700 300 Balance Sheet Items Cash & marketable securities Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital 1-40 41 350 410 For 2019, the unaudited balance sheet and income statement are presented in Tables 2 and 3, respectively. Table 2: Unaudited Balance Sheet for 2019 YE Balance Sheet Items Cash & marketable weari Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital Before Audit Dec 31, 2019 105 255 310 1.810 350 110 164 615 350 410 Table 3: Unedited Income Statement for 2019 YE Before Audit Income Statement Items Dec 31, 2019 Sales Cost of goods sold 3,050 Operating expenditures Interest expense Taxes 540 51 150 Upon analyzing the unaudited 2019 financials, Lemi Bey, the auditor of the Ath Inc., have found following incorrect journal entries Cash collection of $35 of accounts receivables have not been journalised, . Sales of $25 on accounts receivable of items with a cost of $14 has been journalized twice, . Cash payment of $11 of short term debt has not been journalized. Atle Inc. has adjusted the respective events, and published its audited financial statements where assets are equal to linbilities and the stockholder's equity. Currently, Ath Inc.'s shares are trading at $14.45, and it has 356 shares outstanding. Ath Inc.'s current and expected dividend payout ratio is 91%. Return on risk free asset and market are 5.50% and 19.50%, respectively. B of Ath Inc. is estimated to be 1.12. Refer to page 294 of Week 12 material for required rate of return calculations Calculate below according to December 31, 2019 audited financial statements. Q-5) Cash conversion cycle. Q-6) Debt-to-capital ratio (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). - Q-7) Constant growth rate (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-8) Value of Ath Inc. according to constant growth model. Q-9) Price-to-earnings multiple (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-10) Price-to-book value multiple (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Atle Inc. has reported its audited financial statements for the year-end 2018 in Table 1. Table 1: Auditied Balance Sheet for 2018 YE Audited Dec 31, 2018 195 200 1,700 300 Balance Sheet Items Cash & marketable securities Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital 1-40 41 350 410 For 2019, the unaudited balance sheet and income statement are presented in Tables 2 and 3, respectively. Table 2: Unaudited Balance Sheet for 2019 YE Balance Sheet Items Cash & marketable weari Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital Before Audit Dec 31, 2019 105 255 310 1.810 350 110 164 615 350 410 Table 3: Unedited Income Statement for 2019 YE Before Audit Income Statement Items Dec 31, 2019 Sales Cost of goods sold 3,050 Operating expenditures Interest expense Taxes 540 51 150 Upon analyzing the unaudited 2019 financials, Lemi Bey, the auditor of the Ath Inc., have found following incorrect journal entries Cash collection of $35 of accounts receivables have not been journalised, . Sales of $25 on accounts receivable of items with a cost of $14 has been journalized twice, . Cash payment of $11 of short term debt has not been journalized. Atle Inc. has adjusted the respective events, and published its audited financial statements where assets are equal to linbilities and the stockholder's equity. Currently, Ath Inc.'s shares are trading at $14.45, and it has 356 shares outstanding. Ath Inc.'s current and expected dividend payout ratio is 91%. Return on risk free asset and market are 5.50% and 19.50%, respectively. B of Ath Inc. is estimated to be 1.12. Refer to page 294 of Week 12 material for required rate of return calculations Calculate below according to December 31, 2019 audited financial statements. Q-5) Cash conversion cycle. Q-6) Debt-to-capital ratio (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). - Q-7) Constant growth rate (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-8) Value of Ath Inc. according to constant growth model. Q-9) Price-to-earnings multiple (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-10) Price-to-book value multiple (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05)
