Instructions
| Instructions | |
| NAME: | |
| To complete the homework assignments in the templates provided: | |
| 1. | The question is provided for each problem. You may need to refer to your textbook for additional information in a few cases. |
| 2. | You will enter the required information into the shaded cells. |
| 3. | The cells are coded: |
| a) T requires a text answer. Essay questions require references; use the textbook. | |
| b) C requires a calculation, using Excel formulas or functions. You cannot perform the operation on a calculator and then type the answer in the cell. You will enter the calculation in the cell, and only the final answer will show in the cell. I will be able to review your calculation and correct, if necessary. | |
| c) F requires a number only. In some problems, a “Step 1” is added to help you solve the problem. | |
| d) Formula requires a written formula, not the numbers. For example, the rate of return = [(1 + nominal)/ (1+inflation)]-1, or D (debt) + E (equity) = V (value). | |
| 4. | Name your assignment file as “LastnameFirstinitial-BUSN602-Week#”, and submit by midnight ET, Day 7. |
DQ14-1
| Discussion Question 14-1 |
| List some reasons why financial statement analysis is conducted. Identify some of the participants that analyze firms’ financial statements. |
| Answer: |
| T |
DQ14-3
| Discussion Question 14-3 |
| Identify the types of ratios that are used to analyze a firm’s financial performance based on its income statements and balance sheets. |
| Answer: |
| T |
P14-11
| Problem14-11 | |||
| Using the information in Tables 14.1 and 14.2, compute the financial ratios we discussed in this chapter for Walgreens, using the 2010 and 2009 data. | |||
| Answers: | |||
| Enter the answers in blue shaded cells | |||
| Ratio (text) | 2010 | 2009 | |
| Current ratio | T | C | C |
| Quick Ratio | T | C | C |
| Average Payment Period | T | C | C |
| Total Asset Turnover | T | C | C |
| Fixed Asset Turnover | T | C | C |
| Average Collection Period | T | C | C |
| Inventory Turnover | T | C | C |
| Total Debt to Total Assets | T | C | C |
| Equity Multiplier | T | C | C |
| Interest Coverage | T | C | C |
| Operating Profit Margin | T | C | C |
| Net Profit Margin | T | C | C |
| Operating Return on Assets | T | C | C |
| Return on Assets | T | C | C |
| Return on Equity | T | C | C |
DQ15-1
| Discussion Question 15-1 |
| What is meant by working capital? |
| Answer: |
| T |
DQ15-31
| Discussion Question 15-31 |
| What risks arise when a firm lowers its credit standards to try to increase sales volume? |
| Answer: |
| T |
DQ15-33
| Discussion Question 15-33 |
| How is the financial manager involved in the management of inventories? |
| Answer: |
| T |
P15-4
| Problem 15-4 | ||||
| Inventories for Robinson Company are $500,000 for 2014 and $350,000 for 2013. Suppose the Robinson Company had a cost of goods sold of $1,000,000 in 2013 and $1,200,000 in 2014. | ||||
| a. Calculate the inventory turnover for each year. Comment on your findings. b. What would have been the amount of inventories in 2014 if the 2013 turnover ratio had been maintained? | ||||
| Answers: | ||||
| Enter the answers in blue shaded cells | ||||
| Formula | 2013 | 2014 | ||
| a. | Inventory turnover | T | C | C |
| Comment | T | |||
| Formula | 2014 Inventories | |||
| b. | Inventories | T | C | Tip: p. 419 |
