Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with question 4.31 in wiley for fin3400 help explain how to get answer. Problem 4.30 Blackwell Automotive's balance sheet at the end

Please help me with question 4.31 in wiley for fin3400 help explain how to get answer.

image text in transcribed Problem 4.30 Blackwell Automotive's balance sheet at the end of its most recent fiscal year shows the following information: Blackwell Automotive Balance Sheet as of March 31, 2011 Liabilities and Equity: 25,362 Accounts payable and accruals 168,060 Notes payable 183,295 376,717 Total current liabilities Long-term debt Total liabilities 711,256 Common stock 89,879 Retained earnings 1,177,852 Total liabilities and equity Assets: Cash and marketable securities $ Accounts receivable Inventories Total current assets $ Net plant and equipment Goodwill and other assets Total assets $ $ 163,257 21,115 $ 184,372 168,022 352,394 313,299 512,159 1,177,852 $ $ In addition, it was reported that the firm had a net income of $384,529 on sales of $5,979,060. a. What are the firm's current ratio and quick ratio? (Round answers to 2 decimal places, e.g.15.25.) Current Ratio 2.04 times Quick Ratio 1.05 times b. Calculate the firm's days' sales outstanding, total asset turnover ratio, and fixed asset turnover ratio. (Round answers to 2 decimal places, e.g.15.25.) Days Sales Outstanding 10.26 days Total Asset Turnover 5.08 times Fixed Asset Turnover 7.46 times Problem 4.31 The following are the financial statements for Nederland Consumer Products Company for the fiscal year ended September 30, 2011. Nederland Consumer Products Company Income Statement for the Fiscal Year Ended September 30, 2011 Net sales $65,013 Cost of goods sold 31,296 Gross margin $33,717 Marketing, research, administrative exp. 18,066 Depreciation 877 Operating income(loss) $14,774 Interest expense 418 Earnings(loss) before income taxes $14,356 Income taxes 4,432 Net earnings(loss) $ 9,924 Nederland Consumer Products Company Balance Sheet as of September 30, 2011 Assets: Liabilities and Stockholder's Equity: Cash and marketable securities $ 5,611 Accounts payable Investment securities 512 Accrued and other liabilities Accounts receivable 3,290 Taxes payable Total inventories 5,302 Debt due within one year Deferred income taxes 1,083 Prepaid expenses & other receivables 1,680 Total current assets $17,478 Total current liabilities Property, plant, and equip., at cost 30,723 Long-term debt Less: Accumulated depreciation 10,437 Deferred income taxes Net plant and equipment $20,286 Other non-current liabilities $ 3,958 5,891 2,101 6,873 $18,823 9,950 2,808 2,867 Net goodwill & other intangible assets Other non-current assets 29,842 2,229 Total assets $69,835 Total liabilities Convertible Class A preferred stock Common stock Retained earnings Total stockholders' equity (deficit) Total liabilities and stockholders' equity $34,448 1,397 2,059 31,931 $35,387 $69,835 Calculate all the ratios, for which industry figures are available below, for Nederland and compare the firm's ratios with the industry ratios. (Round current ratio, quick ratio, debt ratio, long term debt ratio answers to 2 decimal places, e.g. 12.25 and other answers to 1 decimal place, e.g.12.5 or 12.5%.) Industry Average Current Ratio 2.05 0.93 times Quick Ratio 0.78 0.66 times Gross margin 23.9% 51.86 % Net profit margin 12.3% 22.08 % Debt ratio 0.23 0.00 times Long-term debt to equity 0.98 0.00 times Interest coverage 5.62 24.74 ROA 5.3% 14.21 % ROE 18.8% 28.04 % Problem 4.32 The following are the financial statements for Nederland Consumer Products Company for the fiscal year ended September 30, 2011. Nederland Consumer Products Company Income Statement for the Fiscal Year Ended September 30, 2011 Net sales $65,457 Cost of goods sold 29,357 Gross profit $36,100 Marketing, research, administrative exp. 13,942 Depreciation 729 Operating income(loss) $21,429 Interest expense 455 Earnings(loss) before income taxes 20,974 Income taxes 6,429 Net earnings(loss) $14,545 Nederland Consumer Products Company Balance Sheet as of September 30, 2011 Assets: Liabilities and Stockholder's Equity: Cash and marketable securities $ 5,513 Accounts payable Investment securities 322 Accrued and other liabilities Accounts receivable 3,788 Taxes payable Total inventories 5,125 Debt due within one year Deferred income taxes 1,088 Prepaid expenses & other receivables 2,043 Total current assets $17,879 Total current liabilities Property, plant, and equip., at cost 27,781 Long-term debt Less: Accumulated depreciation 9,958 Deferred income taxes Net plant and equipment $17,823 Other non-current liabilities Net goodwill & other intangible 24,105 Total liabilities assets Other non-current assets 2,145 Convertible Class A preferred stock Common stock Retained earnings Total stockholders' equity (deficit) Total assets $61,952 Total liabilities and stockholders' equity $ 4,475 6,744 1,955 7,455 $20,629 9,539 2,782 2,547 $35,497 1,698 2,223 22,534 $26,455 $61,952 Compute the firm's ratios for the following categories: (Round your answers to 2 decimal places, e.g. 12.55.) a. Efficiency ratios. b. Asset turnover ratios. c. Leverage ratios. d. Coverage ratios. Efficiency Ratios Inventory turnover ratio Days sales in inventory Accounts receivables turnover DSO 12.77 28.58 17.28 21.12 times days times days Asset Turnover Ratios Total asset turnover Fixed assets turnover 1.06 1.48 times times Leverage Ratios Total debt ratio Debt to equity ratio Equity multiplier .57 1.34 2.34 Coverage Ratios Times interest earned Cash coverage 47.10 48.70 times times Problem 5.5 Your bank pays 9 percent interest semi-annually on your savings account in which you have deposited $3,500. How much money can you expect to have at the end of four years? (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.) Value of investment after 4 years $ 4977.35 Problem 5.6 Your birthday is coming up and instead of other presents, your parents promised to give you $3,000 in cash. Since you have a part time job and thus don't need the cash immediately, you decide to invest the money in a bank CD that pays 8.00 percent quarterly for the next two years. How much money can you expect to earn in this period of time? (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.) Value of investment after 2 years $ 3514.97 Problem 5.7 Find the future value in five years of an investment of $148,000 made today that earns 5.00 percent for the following compounding periods: (Round your final answer to the nearest penny.) Value of investment after 5 years $ a. Quarterly 189741.51 b. Monthly $ 189940.86 c. Daily d. Continuous $ 190002.58 $ 190035.76 Problem 5.9 Roy Gross is considering an investment that pays 6.70 percent. How much will he have to invest today so that the investment will be worth $20,000 in six years? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to the nearest penny.) Amount to be invested today $ 13553.21 Problem 5.10 Maria Addai has been offered a future payment of $20,500 two years from now. If she can earn 7.10 percent compounded annually on her investment, what should she pay for this investment today? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to the nearest penny.) Amount to be invested today $ 13892.08 Problem 5.20 Find the future value of an investment of $5,100 made today for the following rates and periods: (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.) a. 6.25 percent compounded semi-annually for twelve years. Future value $ 10673.46 b. 7.63 percent compounded quarterly for six years. Future value $ 8026.34 c. 8.9 percent compounded monthly for ten years. Future value $ 12377.46 d. 10 percent compounded daily for three years. Future value $ 6883.45 e. 8 percent compounded continuously for two years. Future value $ 5984.91 Problem 5.21 Find the present value of $2,500 under each of the following rates and periods. (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.) a. 8.9 percent compounded monthly for five years. Present value $ 1604.70 b. 6.6 percent compounded quarterly for eight years. Present value $ 1480.82 c. 4.3 percent compounded daily for four years. Present value $ 2104.99 d. 5.7 percent compounded continuously for three years. Present value $ 2107.05 Problem 5.22 Samantha plans to invest some money so that she has $4,200 at the end of three years. What investment amount would be required in each of the following choices: (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.) a. 4.2 percent compounded daily. Amount required to be invested $ 3702.82 b. 4.9 percent compounded monthly. Amount required to be invested $ 3626.92 c. 5.2 percent compounded quarterly. Amount required to be invested $ 3596.96 d. 5.4 percent compounded annually. Amount required to be invested $ 3586.97

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Mathematics For Business Economics, Life Sciences, And Social Sciences

Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker

14th Edition

0134674146, 978-0134674148

More Books

Students also viewed these Finance questions