HI, Can you please answer for this question 1
Here are the Financial statements
1. Copy the Big Rock Candy Mountain Mining financial statements from Problem 1 in Chapter 2 into a new workbook. Set up a ratio worksheet similar to the one in Exhibit 3-6, page 92, and calculate all of the ratios for the firm. a. c. b. Identify at least two areas of potential concern using the ratios. Identify at least two areas that have shown improvement. In 2016 the ROE increased. Explain, in words, why this increase occurred using the DuPont method from equation (3-29). Now use the extended DuPont method from equation (3-33). d. Big Rock Candy Mountain Mining has shown an accounting profit in each of the past two years. Calculate the economic profit for these years and compare it to net income. The WACC is 9%. Using Altman's model for privately held firms, calculate the Z-score for Mike Owjai Manufacturing. Does it appear that the firm is in imminent danger of bankruptcy? e. AutoSave Off H Ch3HW.xlsx - Excel Chanati Sushma C 7 File Home Insert Draw Page Layout Formulas Data Review View Help Power Pivot Search Share Comments Insert == Times New Roman 11 A ab Wrap Text General 28 O s 2X Delete LIV Paste BIU MA EE E Merge & Center Ideas y $ %, 8-28 Sensitivity Format Conditional Format as Cell Formatting Table Styles Styles Sort & Find & Filter Select Editing Clipboard Font Alignment Number Cells Ideas Sensitivity E4 fic E F G H 1 J L M N O P Q R A B D 1 Big Rock Candy Mountain Mining Co. 2 Income Statement 3 For the Year 2015 and 2016 4 2016 2015 5 Sales $369,300 $354,000 6 Cost of Goods 285,400 281,800 7 Gross Profit 83,900 72,200 8 Depreciation 26,820 26,360 9 Selling & Admin.Expense 23,340 21,820 10 Other Operating Expense 1,080 1,080 11 Net Operating Income 32,660 22,940 12 Interest Expense 7,685 7,505 13 Earnings Before Taxes 24,975 15,435 14 Taxes 9,990 6,174 15 Net Income $14,985 $9,261 16 17 Notes: 18 Tax Rate 40.00% 40.00% 19 Shares 52,100 52,100 20 Earnings per Share $0.29 $0.18 21 22 Income Statement Balancesheet Sheet3 + B + 100% Type here to search jj E w 11:32 AM 9/15/2020 AutoSave Off H Ch3HW.xlsx - Excel Chanati Sushma C 7 File Home Insert Draw Page Layout Formulas Data Review View Help Power Pivot Search Share Comments ~A Insert == Times New Roman 11 ab Wrap Text General AY O % LIV Paste BIU Av EE E Merge & Center $ % -28 2X Delete Format Ideas Sensitivity Conditional Format as Cell Formatting Table Styles Styles Sort & Find & Filter Select Editing Clipboard Font Alignment Number Cells Ideas Sensitivity G12 X for D E F H 1 I J J K L L M N O Q R S T U O A B 1 Big Rock Candy Mountain Mining Co. 2 Balance Sheet 3 For the Year Ended December 31,2016 4 2016 2015 5 Assets 6 Cash $14,714 $10,300 7 Marketable Securities $1,841 $550 8 Accounts Receivable S41,090 $42.100 9 Inventory $46,910 $48,490 10 Total Current Assets $104,555 $101,440 11 Gross Fixed Assets $388,000 $352,600 12 Accumulated Depreciation $78,020 $51,200 13 Net Plant &Equipment $309,980 $301,400 14 Total Assets $414,535 $402,840 15 16 Liabilities & Owner's Equity 17 Accounts Payable $35,200 $32.700 18 Accrued Expenses $2,850 $2,740 19 Total Current Liabilities $38,050 $35,440 20 Long-term Debt $152,700 $158,600 21 Total Liabilities $190,750 $194,040 22 Common Stock($1.00 par) $52,100 $52,100 23 Additional Paid-in-Capital $121,500 $121.500 24 Retained Earnings $50,185 $35.200 25 Total Owner's Equity $223,785 $208.800 26 Total Liab. & Owner's Equi$414,535 $402.840 | Income Statement Balancesheet Sheet3 + 3 Type here to search + 86% 11:32 AM 9/15/2020 E . w 1. Copy the Big Rock Candy Mountain Mining financial statements from Problem 1 in Chapter 2 into a new workbook. Set up a ratio worksheet similar to the one in Exhibit 3-6, page 92, and calculate all of the ratios for the firm. a. c. b. Identify at least two areas of potential concern using the ratios. Identify at least two areas that have shown improvement. In 2016 the ROE increased. Explain, in words, why this increase occurred using the DuPont method from equation (3-29). Now use the extended DuPont method from equation (3-33). d. Big Rock Candy Mountain Mining has shown an accounting profit in each of the past two years. Calculate the economic profit for these years and compare it to net income. The WACC is 9%. Using Altman's model for privately held firms, calculate the Z-score for Mike Owjai Manufacturing. Does it appear that the firm is in imminent danger of bankruptcy? e. AutoSave Off H Ch3HW.xlsx - Excel Chanati Sushma C 7 File Home Insert Draw Page Layout Formulas Data Review View Help Power Pivot Search Share Comments Insert == Times New Roman 11 A ab Wrap Text General 28 O s 2X Delete LIV Paste BIU MA EE E Merge & Center Ideas y $ %, 8-28 Sensitivity Format Conditional Format as Cell Formatting Table Styles Styles Sort & Find & Filter Select Editing Clipboard Font Alignment Number Cells Ideas Sensitivity E4 fic E F G H 1 J L M N O P Q R A B D 1 Big Rock Candy Mountain Mining Co. 2 Income Statement 3 For the Year 2015 and 2016 4 2016 2015 5 Sales $369,300 $354,000 6 Cost of Goods 285,400 281,800 7 Gross Profit 83,900 72,200 8 Depreciation 26,820 26,360 9 Selling & Admin.Expense 23,340 21,820 10 Other Operating Expense 1,080 1,080 11 Net Operating Income 32,660 22,940 12 Interest Expense 7,685 7,505 13 Earnings Before Taxes 24,975 15,435 14 Taxes 9,990 6,174 15 Net Income $14,985 $9,261 16 17 Notes: 18 Tax Rate 40.00% 40.00% 19 Shares 52,100 52,100 20 Earnings per Share $0.29 $0.18 21 22 Income Statement Balancesheet Sheet3 + B + 100% Type here to search jj E w 11:32 AM 9/15/2020 AutoSave Off H Ch3HW.xlsx - Excel Chanati Sushma C 7 File Home Insert Draw Page Layout Formulas Data Review View Help Power Pivot Search Share Comments ~A Insert == Times New Roman 11 ab Wrap Text General AY O % LIV Paste BIU Av EE E Merge & Center $ % -28 2X Delete Format Ideas Sensitivity Conditional Format as Cell Formatting Table Styles Styles Sort & Find & Filter Select Editing Clipboard Font Alignment Number Cells Ideas Sensitivity G12 X for D E F H 1 I J J K L L M N O Q R S T U O A B 1 Big Rock Candy Mountain Mining Co. 2 Balance Sheet 3 For the Year Ended December 31,2016 4 2016 2015 5 Assets 6 Cash $14,714 $10,300 7 Marketable Securities $1,841 $550 8 Accounts Receivable S41,090 $42.100 9 Inventory $46,910 $48,490 10 Total Current Assets $104,555 $101,440 11 Gross Fixed Assets $388,000 $352,600 12 Accumulated Depreciation $78,020 $51,200 13 Net Plant &Equipment $309,980 $301,400 14 Total Assets $414,535 $402,840 15 16 Liabilities & Owner's Equity 17 Accounts Payable $35,200 $32.700 18 Accrued Expenses $2,850 $2,740 19 Total Current Liabilities $38,050 $35,440 20 Long-term Debt $152,700 $158,600 21 Total Liabilities $190,750 $194,040 22 Common Stock($1.00 par) $52,100 $52,100 23 Additional Paid-in-Capital $121,500 $121.500 24 Retained Earnings $50,185 $35.200 25 Total Owner's Equity $223,785 $208.800 26 Total Liab. & Owner's Equi$414,535 $402.840 | Income Statement Balancesheet Sheet3 + 3 Type here to search + 86% 11:32 AM 9/15/2020 E . w
