please make answers in word documents. questions is in screenshots pictures.
U.S. CORPORATION 2018 Balance Sheets ($ in millions) Assets Liabilities and Owners' Equity 2017 2018 2017 2018 Current assets Current liabilities Cash 110 150 Accounts payable 300 320 Accounts 500 650 Notes payable 210 150 receivable Inventory 600 612 Total $510 $470 Total $1210 $141 2 Long-term debt $200 $250 Fixed Assets Net plant and $1700 $180 Owners' equity equipment 0 Common stock and paid-in 700 740 paid-in surplus Retained earnings 1500 1752 Total $220 $2492 0 Total assets $2910 $321 Total liabilities and owners' $291 $3212 2 equity 0 U.S. CORPORATION 2018 Income Statement ($ in millions) Net Sales $1800 Cost of Goods Sold 900 Depreciation 80 Earnings before interest and taxes (EBIT) $820 Interest paid 90 Taxable income $730 Taxes (34%) 248 Net income $482 Dividends 2301. Use the Balance Sheet and Income Statement for U.S. Corporation to do the following questions i) Explain the meaning of each ratio in your own words ii) Calculate each ratio for 2018. (15 points) a) Current Ratio Explanation: Calculation: b) Total Debt Ratio Explanation: Calculation: c) Times interest earned Explanation: Calculation: d) Receivables turnover Explanation: Calculation: e) Return on assets Explanation: Calculation:2. You estimate that you will need $15,000 in four years (four years from now) to get married. If the interest rate is 5% annually, how much do you need to put in an account today (now), so that you will have 515,000 in four years' time? (10points) 3. Suppose you put $1000 in an account today and you need to have 56727.5 in the future. If the bank pays 10%, how many years (n) will it take you to have 56727.5? (10points) 4. If you buy a bicycle for $1000 and sell it for 51276.3 after 5 years. What is your rate of return? (calculate your interest rate in %) (10 points) 5. You need $3000 annually (every year=annuity) for 3 years to give to European University of Lefke to graduate. How much money should your dad deposit today in a bank paying 5% so that you will have the needed $3000 annual payments? (10 points) 6. a) Find the amount to which $100 will grow at an interest rate of 16% compounded semiannually for 4 years (future value). ) Find the present value of $300 due in the future if interest rate is 16% nominal rate quarterly compounded for 4 years. (10 points) a) b ) 7. Suppose you wish to start up your coffee shop. You need to borrow $50,000 today. You intend to pay back $50,000 in equal payments, every year for 25 years. If the annual interest rate is 7%, how much do you need to pay the bank every year (annuities) for 25 years? (10 points) 8. Your uncle offered you to give you the following. Interest rate is 5% per year. Would you prefer Option A or Option B? Show calculations (15 points) Option A 0 1 2 3 4 5 ? $100 $100 $100 $100 $100 Option B 0 1 2 3 4 5 600 50 509. Current Accounts 2015: Current Assets: 4,400; Current Liabilities = 1,500 2014: Current Assets = 3,500; Current Liabilities = 1,200 Fixed Assets and Depreciation 2015: Net Fixed Assets = 3,400; 2014: Net Fixed Assets = 3,100 Depreciation Expense = 400 Long-term Debt and Equity (Retained Earnings not given) 2015: Long-term Debt = 4,000; Common stock 8: Additional paid in capital = 400 2014: Long-term Debt = 3,950; Common stock & Additional paid in capital = 400 Income Statement Earnings Before Interest and Taxes: 2,000; Taxes = 300 Interest Expense = 350; Dividends = 500 Use the information above to calculate=Ll5 points) a) Operating cash flow b) Net capital spending c) Changes in net working capital d) Cash flow to creditors e) Cash flow to stockholders f) Cash flow from assets
