Please I need solution for

-P2-18 which is on page 90,91

-P2-20 which is on page 91,92

I've also attached correct answer for these Problems. So I just need full answers with explanation how you get this answers.

Thank you very much,

From Dummy clearly.

1-2 b. $150,000 1-4 a. Cash inflows: $4,950 Ca 1-6 a. $19,700 Ca b. $72,800 To c. 21.3% 812 3-10 C. 1-9 e. Total tax liability: $206,400 of 1-10 a. Earnings after tax: $18,000 3-15 a. To 1-11 b. Asset X: $100 b. T Asset Y: $2,000 3-17 a. T 2-3 a. Net profit after tax: $38,500 1052 -,d H 2-5 a. Earnings per share: $1.162 812 5 3-19 a. 2-7 a. Total liquid assets: $5,700 C . Total current liabilities: $2,400 4-3 C: 2-9 Initial sales price: $9.50 flei s2 .d 4-4 A: 2-10 b. Earnings per share: $2.36 .ON 5 D: c. Cash dividend per share: $1.50 ed 4-6 a. 2-13 4-8 a. a. Current ratio 4-11 B: 2006: 1.88 2008: 1.79 Quick ratio D 2006: 1.22 2008: 1.24 4-18 a . 2-16 a. 45.62 days 2-18 Creek Industry 4-19 a. Debt ratio Saudibaggy 0.73 0 0.51 Times interest earned 3.00 7.30 4-23 b. 2-20 a. 000 Pelican Timberland 4-25 b. (1) Debt ratio 89 000,OF 10% 50% (2) Times interest 0,012 4-27 a. earned 62.5 12.5 4-29 b b. Pelican Timberland 4-32 a (1) Operating margin 25% 25% 4-33 b (2) Net profit margin 14.8% 13.8% (3) ROA 36.9% 34.5% 4-34 (4) ROE 41.0% 69.0% 2-23 a. Actual 2009 Current ratio: 1.04 4-40 57 days 4-43PART ONE Introduction to Managerial Finance 92 a. Calculate the following debt and coverage ratios for the two companies. Discuss their financial risk and ability to cover the costs in relation to each other. (1) Debt ratio (2) Times interest earned ratio D. Calculate the following profitability ratios for the two companies. Discuss their profitability relative to each other. (1) Operating profit margin (2) Net profit margin too ba (3) Return on total assets (4) Return on common equity c. In what way has the larger debt of Timberland Forest made it more profitable than Pelican Paper? What are the risks that Timberland's investors undertake when they choose to purchase its stock instead of Pelican's? P2-21 Ratio proficiency Mcdougal Printing, Inc., had sales totaling $40,000,000 in fiscal year 2009. Some ratios for the company are listed below. Use this information to determine the dollar values of various income statement and balance sheet accounts as requested. Mcdougal Printing, Inc. Year Ended December 31, 2009 Sales $40,000,000 Gross profit margin 80% Operating profit margin 35% Net profit margin 8% Return on total assets 16% Return on common equity 20% Total asset turnover 2 Average collection period 62.2 days Calculate values for the following: a. Gross profits b. Cost of goods sold c. Operating profits d. Operating expenses e. Earnings available for common stockholders f. Total assets g. Total common stock equity h. Accounts receivable P2-22 Cross-sectional ratio analysis Use the financial statements on page 93 for Fox Manufacturing Company for the year ended December 31, 2009, along with the industry average ratios at the top of page 94, to: a. Prepare and interpret a complete ratio analysis of the firm's 2009 operations. b. Summarize your findings and make recommendations.90 PART ONE Introduction to Managerial Finance (P2-18 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $4,000,000 loan, to assess the firm's financial leverage and financial LG risk. On the basis of the debt ratios for Creek, along with the industry averages (see top of page 91) and Creek's recent financial statements (below), evaluate and recommend appropriate action on the loan request. Creek Enterprises Income Statement for the Year Ended December 31, 2009 $30,000,000 21,000,000 Sales revenue $ 9,000,000 Less: Cost of goods sold Gross profits Less: Operating expenses $3,000,000 Selling expense 1,800,000 General and administrative expenses 200,000 Lease expense 1,000,000 Depreciation expense 6,000,000 Total operating expense $ 3,000,000 Operating profits 1,000,000 Less: Interest expense $ 2,000,000 Net profits before taxes 800,000 Less: Taxes (rate = 40%) Net profits after taxes $ 1,200,000 Less: Preferred stock dividends 100,000 Earnings available for common stockholders $ 1,100,000 Creek Enterprises Balance Sheet December 31, 2009 Assets Liabilities and Stockholders' Equity Current assets Cash Current liabilities $ 1,000,000 Marketable securities Accounts payable 3,000,000 Accounts receivable 12,000,000 Notes payable $ 8,000,000 8,000,000 Inventories Accruals 7,500,000 500,000 Total current assets Gross fixed assets (at cost) $23,500,000 Total current liabilities Long-term debt (includes financial leases)6 $16,500,000 Land and buildings Stockholders' equity $20,000,000 $11,000,000 Machinery and equipment 20,500,000 Preferred stock (25,000 shares, Furniture and fixtures $4 dividend) Gross fixed assets 8,000,000 Common stock (1 million shares at $5 par) $ 2,500,000 Less: Accumulated depreciation $39,500,000 5,000,000 Net fixed assets 13,000,000 Paid-in capital in excess of par value $26,500,000 Retained earnings 4,000,000 Total assets $50,000,000 Total stockholders' equity 2,000,000 Total liabilities and stockholders' equity $13,500,000 bRequired annual principal payments are $800,000. "The firm has a 4-year financial lease requiring annual beginning-of-year payments of $200,000. Three years of the lease have yet to run. $50,000,000CHAPTER 2 Financial Statements and Analysis 91 Industry averages Debt ratio 0.51 Times interest earned ratio 7.30 Fixed-payment coverage ratio 1.85 P2-19 Common-size statement analysis A common-size income statement for Creek Enterprises' 2008 operations follows. Using the firm's 2009 income statement pre- sented in Problem 2-18, develop the 2009 common-size income statement and com- addsatlong stom sis pare it to the 2008 statement. Which areas require further analysis and investigation? Creek Enterprises Common-Size Income Statement for the Year Ended December 31, 2008 Sales revenue ($35,000,000) 100.0% Less: Cost of goods sold 65.9 Gross profits 34.1% Less: Operating expenses Selling expense 12.7% General and administrative expenses 6.3 Lease expense 0.6 Depreciation expense 3.6 Total operating expense 23.2 Operating profits 10.9% Less: Interest expense 1.5 Net profits before taxes 9.4% Less: Taxes (rate = 40%) 3.8 Net profits after taxes 5.6% Less: Preferred stock dividends 0.1 Earnings available for common stockholders 5.5% P2-20 The relationship between financial leverage and profitability Pelican Paper, Inc., and Timberland Forest, Inc., are rivals in the manufacture of craft papers. Some financial statement values for each company follow. Use them in a ratio analysis that compares the firms' financial leverage and profitability. Item Pelican Paper, Inc. Timberland Forest, Inc. Total assets $10,000,000 $10,000,000 Total equity (all common) 9,000,000 5,000,000 Total debt 1,000,000 5,000,000 Annual interest 100,000 500,000 Total sales $25,000,000 $25,000,000 EBIT 6,250,000 6,250,000 Earnings available for common stockholders 3,690,000 3,450,00