Answered step by step
Verified Expert Solution
Question
1 Approved Answer
If Yellow Hammer had reduced its DSO to 30 days in 2019 and used the funds saved to down short-term debt, what would be the
If Yellow Hammer had reduced its DSO to 30 days in 2019 and used the funds saved to down short-term debt, what would be the new Debt/Cap and Debt/EBITDA ratios for 2019?
Yellow Hammer Corporation Income Statement Year Ended December 31 (in $ millions) Total sales Cost of sales Gross Profit Selling, general, and administrative expenses Research and development Depreciation and amortization Operating Income Interest income (expense) Pretax Income Taxes Net Income 2019 207.0 144.9 62.1 24.8 8.2 2.0 27.1 10.8 16.2 4.1 12.2 2018 172.5 120.8 51.8 20.7 7.6 1.5 22.0 10.2 11.8 2.9 8.8 2017 150.0 105.0 45.0 18.0 6.4 1.0 19.6 8.0 11.6 2.9 8.7 Yellow Hammer Corporation Consolidated Balance Sheet Year Ended December 31 in $ millions) 2019 2018 2019 2018 Assets Current Assets Cash Accounts receivable Inventories Other current assets Total current assets 17.01 23.82 48.30 2.00 91.13 14.18 19.85 40.25 2.00 78.28 Llabilitles and Stockholders' Equity Current Llabilities Accounts payable Notes payable/short-term debt Current maturies of long-term debt Other current liabilities Total current liabilities 15.88 25.20 5.50 12.77 59.35 1323 11.50 5.50 6.50 36.73 Long-Term Llabilities Long-term debt Deferred taxes Total long-term liabilities 104.50 11.96 116.46 110.00 7.45 117.45 Long-Term Assets Land Buildings Equipment Less accumulated depreciation Net property, plant, and equipment Goodwill and intangible assets Other long-term as sets Total long-term assets 95.50 36.50 39.70 -18.70 153.00 20.00 21.88 194.88 95.50 30.50 33.00 - 17.50 141.50 20.00 13.80 175.30 Total Llabilitles Stockholders' Equity 175.81 110.20 154.18 99.40 Total Llabilitles and Stockholders' Equity 286.01 253.58 Total assets 286.01 253.58Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started