Use below information for Questions 5 to 10: Atl Inc. has reported its audited financial statements for the year-end 2018 in Table 1. Table 1: Auditied Balance Sheet for 2018 YE Audited Dec 31, 2018 Balance Sheet Items Cash & marketable securities Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital 92 195 230 1,700 340 96 140 43 692 360 430 For 2019, the unaudited balance sheet and income statement are presented in Tables 2 and 3, respectively. Table 2: Unaudited Balance Sheet for 2019 YE Balance Sheet Items Cash & marketable securities Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital Before Audit Dec 31, 2019 105 265 310 1,830 320 110 163 55 612 360 430 Table 3: Unaudited Income Statement for 2019 YE Before Audit Income Statement Items Sales Cost of goods sold Operating expenditures Interest expense Taxes Dec 31, 2019 4,200 3,060 530 53 120 Upon analyzing the unaudited 2019 financials, Lemi Bey, the auditor of the Atl Inc., have found following incorrect journal entries: Cash collection of $32 of accounts receivables have not been journalized, Sales of $26 on accounts receivable of items with a cost of $13 has been journalized twices, Cash payment of $13 of short term debt has not been journalized. Atli Inc. has adjusted the respective events, and published its audited financial statements where assets are equal to liabilities and the stockholder's equity. 3 Assume taxes have not been affected by this adjustment. Currently, Atl Inc.'s shares are trading at $13.45, and it has 366 shares outstanding. Atl Inc.'s current and expected dividend payout ratio is 93%. Return on risk free asset and market are 5.20% and 19.60%, respectively. B of Atl Inc. is estimated to be 1.32. Refer to page 294 of Week 12 material for required rate of return calculations. Calculate below according to December 31, 2019 audited financial statements. Q-5) Cash conversion cycle. Q-6) Debt-to-capital ratio (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Use below information for Questions 5 to 10: Atl Inc. has reported its audited financial statements for the year-end 2018 in Table 1. Table 1: Auditied Balance Sheet for 2018 YE Audited Dec 31, 2018 Balance Sheet Items Cash & marketable securities Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital 92 195 230 1,700 340 96 140 43 692 360 430 For 2019, the unaudited balance sheet and income statement are presented in Tables 2 and 3, respectively. Table 2: Unaudited Balance Sheet for 2019 YE Balance Sheet Items Cash & marketable securities Accounts receivable Inventories Gross property, plant & equipment Accumulated depreciation Accounts payable Short term debt Current portion of the long term debt Long term debt Common stock Paid in capital Before Audit Dec 31, 2019 105 265 310 1,830 320 110 163 55 612 360 430 Table 3: Unaudited Income Statement for 2019 YE Before Audit Income Statement Items Sales Cost of goods sold Operating expenditures Interest expense Taxes Dec 31, 2019 4,200 3,060 530 53 120 Upon analyzing the unaudited 2019 financials, Lemi Bey, the auditor of the Atl Inc., have found following incorrect journal entries: Cash collection of $32 of accounts receivables have not been journalized, Sales of $26 on accounts receivable of items with a cost of $13 has been journalized twices, Cash payment of $13 of short term debt has not been journalized. Atli Inc. has adjusted the respective events, and published its audited financial statements where assets are equal to liabilities and the stockholder's equity. 3 Assume taxes have not been affected by this adjustment. Currently, Atl Inc.'s shares are trading at $13.45, and it has 366 shares outstanding. Atl Inc.'s current and expected dividend payout ratio is 93%. Return on risk free asset and market are 5.20% and 19.60%, respectively. B of Atl Inc. is estimated to be 1.32. Refer to page 294 of Week 12 material for required rate of return calculations. Calculate below according to December 31, 2019 audited financial statements. Q-5) Cash conversion cycle. Q-6) Debt-to-capital ratio (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05)
