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What are the companys current ratio and debt ratio for both years? What does the trend in these ratios tell you about the companys liquidity
What are the companys current ratio and debt ratio for both years? What does the trend in these ratios tell you about the companys liquidity and solvency?
In year 2, net cash increased by 25. What does the statement of cash flows tell you about the firms ability to generate cash?
Develop and analyze the results of an extended DuPont equation based on the two years of data above.
Given the following financial statements for vour firm answer the questions on the next page. Income Statement for years Year 2 Year 1 Sales Operating Costs excluding Depreciation and Amortization EBITDA Depreciation and Amortization EBIT Interest Expense EBT Taxes (40%) NI $5,500 4,675 825 190 $635 62 $573 229 $344 $5,000 4,250 750 180 $570 50 $520 208 $312 Balance Sheet for years ending December 31 Year 2 Year 1 Assets: Cash Short Term Investments Accounts Receivable Inventories $275 1,375 825 $2,530 1,925 $4,455 $250 50 1,250 750 $2,300 1,750 $4,050 Total Current Assets Net Plant and Equipment Total Assets Liabilities: Notes Payable Accounts Payable Miscellaneous Payables $192 580 245 $1,017 550 $1,567 2154 734 46 $2,888 $4,455 $100 500 250 $850 500 $1,350 2,200 500 0 $2,700 $4,050 Total Current Liabilities Long-Term Debt Total Liabilities Common Stock Retained Earnings Less Treasury Stock Total Shareholder Equity Liabilities and Shareholder Equity Cash Flow Statement for year ending December 31, Year 2 Operating Activities Net Income Depreciation and Amortization Increase in Accounts Receivables Increase in Inventories Increase in Accounts Payables Decrease in Miscellaneous Payables $344 190 (125) (75) 80 Net Cash Provided by Operations 409 Investing Activities (365) Purchase of equipment Increase in Short Term Investments Net Cash Used for Investment Activities (370) Financing Activities Dividends paid Increase in Notes Payable Increase in Long Term Debt Purchase stock for Treasury (110) 92 50 (46) (14) Net Cash used for Financing Activities Beginning Cash Balance January 1, 2010 Ending Cash Balance December 31, 2010 250 275 $25 Net Cash Flow
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