Question 1 [5 pts]

A company reported the following information in its financial statements:

total assets 100,000, total liabilities 30,000, and retained earnings 45,000

net working capital 25,000

sales revenues 180,000 and earnings before interest and depreciation (EBIT) 72,000

the number of shares outstanding 10,000 thousand shares and the equity price $13.5 per share.

All figures are given in thousand dollars, except for the number of shares and the per-share price. Compute Altmans Z score defined as follows:

Z score=1.2NWCassets+1.4retained earningsassets+3.3EBITassets+0.6market value of equityliabilities+1.0salesassets

Answer (show the steps/calculation toward yourresults):

For Questions 23, use the information about Green Energy Source Inc. (GES) provided below.

GES Inc. balance sheet:

	FYE 2071	FYE 2070
Assets:
Cash & cash equivalents	7,000	5,000
Accounts receivable	18,000	14,000
Inventories	13,000	11,000
Other current assets	15,000	17,000
Plant & equipment, net	600,000	420,000
Intangible assets, net	15,000	36,000
Total assets	$680,000	$503,000
Liabilities & equity:
Accounts payable	24,000	21,000
Current portion of long-term debt	42,000	2,000
Other current liabilities	4,000	2,000
Long-term liabilities	420,000	290,000
Stockholders equity	190,000	188,000
Total liabilities & equity	$680,000	$503,000

GES Inc. income statement:

	FY 2071
Sales revenues	$820,000
Cost of good sold	510,000
Sales, general & admin. expenses	110,000
EBIT	200,000
Interest expense	120,000
Income tax expense	20,000
Net income	60,000

Question 2 [5 pts]

Use the information about GESInc. provided above to answer questions (a) and (b).

Calculate the firms current ratio for FY 2070.

Answer (show the steps/calculation toward your results):

Calculate the current ratio for FY 2071 and provide the main reason for the change in the ratio from FY 2070 to FY 2071.

Answer (show the steps/calculation toward yourresults):

Question 3 [5 pts]

Use the information about GESInc. provided above to answer questions (a) and (b).

Calculate the turnover ratios, respectively, for accounts receivable, inventories, and accounts payable for FY 2071. *Use average balance for all B/S items and use the definitions introduced in the class.

Answer (show the steps/calculation toward yourresults):

Calculate the days accounts receivable, days inventory turnover, and days accounts payable.

Answer (show the steps/calculation toward yourresults):