Coffeez Ltd Comparative Balance Sheet As at 30 June 2010 and 2009 2009 2010 $000 $000 30 20 260 90 80 180 Cash Accounts Receivable Inventory Land Buildings Accumulated Depreciation Buildings Total Assets 360 350 345 370 (240) (210) 775 860 80 55 45 60 490 330 Accounts Payable Income Tax Payable Borrowings Share Capital Retained Profits Total Shareholders' Equity and Liabilities 65 50 180 280 860 775 Coffeez Ltd. Income Statement For Year Ended 30 June 2010 2010 $000 Sales 480 Less: Cost of Goods Sold Depreciation Expenses Wages expense Interest Expense Profit before Tax Income Tax Expense Net Profit (190) (30) (35) (40) (295) 185 (60) 125 Additional information. 1. Assume all sales and purchases were on credit. 2. There was no sale of land or buildings, and none of the non-current assets were revalued in either year. 3. Dividends were paid. For the year ending 30 June 2010, net cash flow from borrowings was: (note that for this question, the amount in bracket in the answers represent a net cash outflow. For example, $(100,000) means a net cash outflow of $100,000). a. $160,000 b. $245,000 c. ($130,000) d. $40,000 e. ($40,000) Coffeez has the following ratios in 2010: Return on assets (ROA) 14.5 per cent; Return on equity (ROE) 51 per cent; and Current ratio (CR) of 2.96:1. During 2010 the company paid cash to settle an amount of account payable for a supplier. This transaction would: (ignore depreciation expense and tax) a. increase ROA and increase CR but have no effect on ROE. b. increase ROA and increase ROE but decrease CR. c. increase ROA and increase ROE but have no effect on CR. d. no effect on these three ratios. e. decrease ROE but have no effect on ROA and no effect on CR. For the year ending 30 June 2010, net cash flow from investing activities was: (note that for this question, the amount in bracket in the answers represent a net cash outflow. For example, $(100,000) means a net cash outflow of $100,000). a. ($25,000) O b. $25,000 c. ($35,000) d. $10,000 e. ($20,000) Which of the following statements is TRUE about Coffeez in 2010: a. The company paid $35,000 cash for interest. C. The company paid $30,000 cash to settle the depreciation expense. The company's net decrease in cash held was $10,000. d. The company paid $40,000 cash for wages. The company received $10,000 from dividend income. e. Which of the following statements about ratio analysis is most correct? C. a. Ratio analysis provides the only source of information that investors need to evaluate whether to invest in a company b. Ratio analysis does not need to be accompanied with industry information. The usefulness of ratio analysis depends on the reliability of input information d. Ratio analysis provides information about both financial and non-financial performance of the company. e. Ratio analysis does not remove the size effect when comparing different companies For the year ending 30 June 2010, cash paid for dividends was: a. O; No dividends were paid. b. $180,000 c. $225,000 d. $200,000 O e. $130,000 From 2010 to 2009, the company's debtors turnover (in times) decreased. Which of the following is correct? a. The company is paying their supplier quicker in 2010 than in 2009 b. The company is collecting cash from credit sales slower in 2010 than in 2009 The company is collecting cash from credit sales quicker in 2010 than in 2009 d. The company is paying their supplier slower in 2010 than in 2009 e. The company is selling their inventory slower in 2010 than in 2009 C. For the year ending 30 June 2010, the cash collected from customers was: a. $480,000 b. $180,000 C. $680,000 O d. $300,000 e. $560,000 From 2009 to 2010, Coffeez return on assets (ROA) decreased from 16.8% to 14.5% and profit margin increased from 15.1% to 26%. This must mean that Coffeez's: a. Cost of goods sold increased. O b. Current ratio decreased. C. Asset turnover decreased. d. Quick ratio increased. O e. Asset turnover increased. For the year ending 30 June 2010, the cash paid for taxes was: a. $25,000 O b. $40,000 O c. $75,000 d. $60,000 e. $55,000 In 2009 Coffeez inventory turnover was 3.19 times. In 2010, their inventory turnover was 2.11 times. This suggests that: (choose the most appropriate answer) a. C. None of the options are correct. b. The company took fewer days to pay for their inventory in 2010 than in 2009. The company took more days to sell inventory in 2010 than in 2009. d. The company took more days to pay for their inventory in 2010 than in 2009. The company took fewer days to sell inventory in 2010 than in 2009. e. For the year ending 30 June 2010, the cash paid to suppliers was: a. $460,000 O b. $100,000 c. $190,000 d. $485,000 e. $75,000 Coffeez has the following ratios in 2010: Debt to Equity (DTE) ratio 2.51:1, Return on asset (ROA) 14.5 per cent; and Quick ratio (QR) of 2.24:1. During 2010 the company bought inventory on credit. This transaction would: a. decrease ROA and increase DTE and decrease QR. O b. increase ROA and decrease DTE and increase QR. C. decrease ROA and increase DTE and increase QR. d. increase ROA and decrease DTE and decrease QR. e. increase ROA and increase DTE and decrease QR. For the year ending 30 June 2010, net cash flow related to share issue/buy backs was: (note that for this question, the amount in bracket in the answers represent a net cash outflow. For example, $(100,000) means a net cash outflow of $100,000). a. $15,000 b. $60,000 c. ($25,000) d. ($15,000) e. $25,000