Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show work and forumlas to understand how to solve the problem (not excel) Base your answers for questions 4 through 6 on the following

image text in transcribed
image text in transcribed
please show work and forumlas to understand how to solve the problem (not excel)
Base your answers for questions 4 through 6 on the following information for Nguyen Resorts Incorporated. Nguyen Resorts common stock is trading for $9 per share and they have 100,000 shares outstanding Cash BALANCE SHEET $ 50.000 Accounts Payable 200.000 Notes Payable $ 100.000 Accounts Receivable 250.000 Inventory 400,000 350.000 650.000 TOTAL CURRENT LIAB. Long-Term Debt Shareholders's Equity TOTAL CURRENT ASSETS Net Fixed Assets 1.000.000 1,350,000 650.000 TOTAL ASSETS $ 2,000,000 TOTAL LIAB. AND S/E 2,000,000 INCOME STATEMENT Net Sales (all credit) Cost of Goods Sold Earnings before Interest & Taxes Interest Earnings before Taxes Federal Income Taxes (40%) Net Income $ 3,000,000 2,500,000 $ 500.000 400,000 $ 100,000 40,000 $ 60,000 Profit Margin Debt Ratio INDUSTRY AVERAGE Inventory R Total Turnover 0 Asset Ratio E Tumover Current Ratio Average Collectio Period 30 days Quick Ratio n Fixed Asset Tumover Ratio 1.8 6.4% 50% 12.0 18% 1.5 1.25 4. The liquidity ratios indicate the following Here all liquidity ratio includes both current ratio and quick ratio. a. All liquidity ratios indicate that Nguyen Resorts is in a very good liquidity position. b. All liquidity ratios indicate that Nguyen Resorts is in a poor liquidity position. c. Nguyen Resorts is carrying too much debt. d. Nguyen Resorts is carrying too much inventory. 5. The extended Dupont equation indicates what about the Nguyen Resorts compared to the industry? (use 2.0 as the industry average for equity multiplier) a. Nguyen Resorts is more profitable than the industry b. Nguyen Resorts' profit margin is high and risk level is high compared to the industry c. Nguyen Resorts' total asset turnover is low and risk level is high compared to the industry d. Nguyen Resorts' profit margin is low and risk level is high compared to the industry e. Nguyen Resorts total asset turnover is low and risk level is low compared to the industry 6. What is Nguyen Resorts' Days in Receivable [ie Days Sales Outstanding (DSC) or Average Collection Period (ACP)]

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

Credit Derivatives Handbook Global Perspectives Innovations And Market Drivers

Authors: Greg Gregoriou, Paul Ali

1st Edition

0071549528, 978-0071549523

More Books

Students also viewed these Finance questions