Problem 3-14 Days’ Sales in Receivables
A company has net income of $188,000, a profit margin of 7.1 percent, and an accounts receivable balance of $127,370. Assuming 70 percent of sales are on credit, what is the company’s days’ sales in receivables? (Use 365 days a year. Do not round intermediate calculation and round your final answer to 2 decimal places. (e.g., 32.16))
Days’ sales in receivables days
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WorksheetProblem 3-14 Days’ Sales in Receivables
Problem 3-15 Ratios and Fixed Assets
The Le Bleu Company has a ratio of long-term debt to long-term debt plus equity of .31 and a current ratio of 1.70. Current liabilities are $870, sales are $6,290, profit margin is 8.7 percent, and ROE is 19.2 percent. What is the amount of the firm’s net fixed assets? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Net fixed assets$
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WorksheetProblem 3-15 Ratios and Fixed Assets
Problem 3-21 Calculating EFN
The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2012 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.
MOOSE TOURS, INC.
2011 Income Statement
Sales$747,000
Costs582,000
Other expenses18,000
________________________________________________________________________________
Earnings before interest and taxes$147,000
Interest expense15,000
________________________________________________________________________________
Taxable income$132,000
Taxes 30%39,600
________________________________________________________________________________
Net income$92,400
________________________________________________________________________________________________________________________________________________________________
Dividends$18,480
Addition to retained earnings73,920
________________________________________
MOOSE TOURS, INC.
Balance Sheet as of December 31, 2011
AssetsLiabilities and Owners’ Equity
Current assets Current liabilities
Cash$20,640 Accounts payable$54,800
Accounts receivable32,960 Notes payable14,000
Inventory69,920________________________________________________________________________________
Total$68,800
________________________________________________________________________________________________________________________________________________________________
Total$123,520 Long-term debt$130,000
________________________________________________________________________________________________________________________________________________________________
Fixed assets Owners’ equity
Net plant and equipment$410,000 Common stock and paid-in surplus$116,000
________________________________________________________________________________ Retained earnings218,720
________________________________________________________________________________
Total$334,720
________________________________________________________________________________
Total assets$533,520 Total liabilities and owners’ equity$533,520
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
________________________________________
If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales? (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. (e.g., 32))
External financing needed$
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Problem 2-22 Financial Statements
Use the following information for Ingersoll, Inc., (assume the tax rate is 34 percent):
20112012
Sales $8,135 $8,709
Depreciation1,155 1,156
Cost of goods sold2,726 3,090
Other expenses669 564
Interest555 633
Cash4,139 5,233
Accounts receivable5,469 6,157
Short-term notes payable824 776
Long-term debt13,790 16,350
Net fixed assets34,755 35,637
Accounts payable4,376 4,215
Inventory9,700 9,968
Dividends986 1,081
________________________________________
Prepare an income statement for this company for 2011 and 2012. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
Ingersoll, Inc.,
Income Statement
20112012
$
$
________________________________________________________________________________
$
$
________________________________________________________________________________
$
$
________________________________________________________________________________
$
$
________________________________________________________________________________________________________________________________________________________________
$
$
________________________________________
Prepare a balance sheet of this company for 2011 and 2012. (Do not round intermediate calculations.Be sure to list the accounts in order of their liquidity.)
Prepare a balance sheet of this company for 2011 and 2012. (Be sure to list the accounts in order of their liquidity.)
Ingersoll, Inc.
Balance Sheet as of Dec. 31
20112012
Assets
$
$
________________________________________________________________________________
Current assets$
$
________________________________________________________________________________
Total assets$
$
________________________________________________________________________________________________________________________________________________________________
Liabilities
$
$
________________________________________________________________________________
Current liabilities$
$
________________________________________________________________________________
Total liabilities & owners’ equity$
$
________________________________________________________________________________________________________________________________________________________________
________________________________________
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Problem 3-18 Common-Size and Common-Base Year Financial Statements
In addition to common-size financial statements, common–base year financial statements are often used. Common–base year financial statements are constructed by dividing the current year account value by the base year account value. Thus, the result shows the growth rate in the account.
Prepare the common-size balance sheet and common–base year balance sheet for the company. Use 2011 as the base year. (Do not round intermediate calculations. Round your common size answers to 2 decimal places. (e.g., 32.16) and common base year answers to 4 decimal places. (e.g., 32.1616))
JARROW CORPORATION
2011Common size2012Common sizeCommon base year
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Assets
Current assets
Cash$8,814
%$10,754
%
%
Accounts receivable22,053
%24,537
%
%
Inventory38,422
%43,397
%
%
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Total$69,289
%$78,688
%
%
Fixed assets
Net plant and equipment$216,970
%$244,940
%
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Total assets$286,259
%$323,628
%
%
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Liabilities and Owners’ Equity
Current liabilities
Accounts payable$42,498
%$47,484
%
%
Notes payable19,064
%18,635
%
%
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Total$61,562
%$66,119
%
%
Long-term debt$25,600
%$32,600
%
%
Owners’ equity
Common stock and paid-in surplus$39,600
%$40,800
%
%
Retained earnings159,497
%184,109
%
%
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Total$199,097
%$224,909
%
%
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Total liabilities and owners’ equity$286,259
%$323,628
%
%
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
________________________________________
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