Use below information for Questions 5 to 10: Atli 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 99 195 280 1.700 340 97 140 12 699 370 420 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 Before Audit Dec 31, 2019 105 275 310 1.820 390 110 168 619 370 Table 3: Unaudited Income Statement for 2019 YE Before Audit Income Statement Items Dec 31, 2019 Sales 4.600 Cost of goods sold Operating expenditures Interest expense 3,070 580 52 Taxes 1960 Upon analyzing the unnudited 2019 financials, Lemi Bey, the auditor of the Ath Inc., have found following incorrect journal entries: : Cash collection of $39 of accounts receivables have not been journalized, Sales of $27 on accounts receivable of items with a cost of $18 has been journalized twice . Cash payment of S12 of short term debt has not been journalized. Ath Inc. has adjusted the respective events, and published its audited financial statements where assets are equal to liabilities and the stockholder's equity, Assume taxes have not been affected by this adjustment, Currently, Ath Inc.'s shares are trading at $18.45, and it has 376 shares outstanding. Ath Inc.'s current and expected dividend payout ratio is 92%. Return on risk free asset and market are 5.90% and 19.70%, respectively. 8 of Ath Inc. is estimated to be 1.22. 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) Q-6) Debt-to-capital ratio (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-7) Constant growth rate (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-8) Value of Atli Inc, according to constant growth model Q-9) Price-to-earnings multiple (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-10) Price-to-book value multiple (Not percent. For example, if you find 0.05, do not enter 3 or 5%. Enter 0.05). Use below information for Questions 5 to 10: Atli 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 99 195 280 1.700 340 97 140 12 699 370 420 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 Before Audit Dec 31, 2019 105 275 310 1.820 390 110 168 619 370 Table 3: Unaudited Income Statement for 2019 YE Before Audit Income Statement Items Dec 31, 2019 Sales 4.600 Cost of goods sold Operating expenditures Interest expense 3,070 580 52 Taxes 1960 Upon analyzing the unnudited 2019 financials, Lemi Bey, the auditor of the Ath Inc., have found following incorrect journal entries: : Cash collection of $39 of accounts receivables have not been journalized, Sales of $27 on accounts receivable of items with a cost of $18 has been journalized twice . Cash payment of S12 of short term debt has not been journalized. Ath Inc. has adjusted the respective events, and published its audited financial statements where assets are equal to liabilities and the stockholder's equity, Assume taxes have not been affected by this adjustment, Currently, Ath Inc.'s shares are trading at $18.45, and it has 376 shares outstanding. Ath Inc.'s current and expected dividend payout ratio is 92%. Return on risk free asset and market are 5.90% and 19.70%, respectively. 8 of Ath Inc. is estimated to be 1.22. 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) Q-6) Debt-to-capital ratio (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-7) Constant growth rate (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-8) Value of Atli Inc, according to constant growth model Q-9) Price-to-earnings multiple (Not percent. For example, if you find 0.05, do not enter 5 or 5%. Enter 0.05). Q-10) Price-to-book value multiple (Not percent. For example, if you find 0.05, do not enter 3 or 5%. Enter 0.05)
