problems 4-1to 4-4

Ratio Analysis and Time Value of Money Return on equity = Times interest earned = Average collection period = Inventory turnover = Fixed asset turnover = Total asset turnover = Problem 4-1 RATIO ANALYSIS The Balance Sheet and the Income Statement for XYZ Manufacturing Corporation are as follows: DATA (All amounts in SAR unless otherwise indicated, and all sales are on credit.) Balance Sheet: Cash 400,000 Acct/Rec 725,000 Inventories 650,000 Current assets 1,775,000 Net fixed assets 690,000 Total assets 2,465,000 Problem 4 2 MARKET-VALUE RATIOS Jeddah Industries has a price earning ratio of 11X. a. If Jeddah's earnings per share are SAR 42.00, what is the price per share of Jeddah's stock? b. Using the price per share you calculated in part a, determine the price / book ratio if leddah's equity-book value is 17.40. Solution a. Price per share b. Price/book ratio Accts/Pay Accrued expenses Short term N/P Current liabilities Long-term debt Owner's equity Total liabilities and owners' equity 265,000 310,000 80,000 655,000 950,000 60,000 2,465,000 Income Statement: Net sales COGS Gross profit Operating expenses Net operating income Interest expense Problem 43 FUTURE VALUE CALCULATIONS To what amount will the following investments accumulate? Annual Amount invested (SAR) Interest Years 80,000 60,000 35.500 12% 97,000 9,550,000 4,865,000 4,584,000 2,984,000 1,700,000 45,000 1,655,000 662,000 993.000 EBT Income taxes Net income Problem 4-4 PRESENT VALUE CALCULATIONS What is the present value of the following future amounts? Annual Future Amount (SAR) Interest Years 900,000 478,000 279,000 12% 440,000 79 12 Calculate the following ratios: Current ratio = Acid test ratio - Debt ratio- Operating profit margin = Operating return on assets = Problem 4-5 Problem 4-5 COMPOUND ANNUITY CALCULATIONS What is the accumulated future sum of each of the following Ordinary annuities? Annual Present Amount (SAR) Interest Years 20,000 596 5 42,000 496 12 8,000 12% 19,500 15 Problem 4-6 PRESENT VALUE OF ANNUITY CALCULATIONS (Chapter 5) What is the present value of each of the following Ordinary annuities? Annual Present Amount (SAR) Interest Years 20,000 12% 42,000 5% 12 8,000 4% 19,500 2% uu Problem 4-7 COMPOUND INTEREST AT NON-ANNUAL RATES (Chapter 5) Given the annual interest rates below, and the compounding period indicated, calculate the FUTURE VALUE for each item. Annual Compounding Present Amount (SAR) Interest Years Period 20,000 696 Semi-annually 42,000 4% Quarterly 8,000 12% Monthly