Question
You are the new CFO of Risk Surfing Ltd, which has current assets of $7,920, net fixed assets of $17,700, current liabilities of $4,580 and
You are the new CFO of Risk Surfing Ltd, which has current assets of $7,920, net fixed assets of $17,700, current liabilities of $4,580 and long-term debts of $5,890. Required:
a. What are the three important questions of corporate finance you will need to address? Please briefly explain them and indicate how they are related to the areas in the balance sheet of a company. (1 mark)
b. Calculate owners' equity and build a balance sheet for the company? (3 marks)
c. How much is net working capital of the company? (1 mark)
d. Calculate the return on assets of the company given that Return on Equity is 30%? (1 mark)
e. What is the PE of the company total number of ordinary share outstanding of the companies is 2,000 and market price of each share is $12? (1 mark)
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