Fin 534 week 2 homework assignment set 1*****a++ rated tutorial

Directions: Answer the following questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in the course shell. This homework assignment is worth 100 points.

Use the following information for Questions 1 through 8:

Assume that you recently graduated and have just reported to work as an investment advisor at the one of the firms on Wall Street. You have been presented and asked to review the following Income Statement and Balance Sheets of one of the firm’s clients. Your boss has developed the following set of questions you must answer.

Income Statements and Balance Sheet

Balance Sheet

 

2012

2013

 

2014

Cash

$9,000

$7,282

$14,000

Short-term investments

48,600

20,000

71,632

Accounts receivable

351,200

632,160

878,000

Inventories

715,200

1,287,360

1,716,480

Total current assets

$1,124,000

$1,946,802

$2,680,112

Gross fixed assets

491,000

1,202,950

1,220,000

Less: Accumulated depreciation

146,200

263,160

383,160

Net fixed assets

$344,800

$939,790

$836,840

Total assets

$1,468,800

$2,886,592

$3,516,952

 

 

 

 

Liabilities and Equity

 

 

 

Accounts payable

$145,600

$324,000

$359,800

Notes payable

200,000

720,000

300,000

Accruals

136,000

284,960

380,000

Total current liabilities

$481,600

$1,328,960

$1,039,800

Long-term debt

323,432

1,000,000

500,000

Common stock (100,000 shares)

460,000

460,000

1,680,936

Retained earnings

203,768

97,632

296,216

Total equity

$663,768

$557,632

$1,977,152

Total liabilities and equity

$1,468,800

$2,886,592

$3,516,952

 

Income Statements

2012

2013

2014

Sales

$3,432,000

$5,834,400

$7,035,600

Cost of goods sold except depr.

2,864,000

4,980,000

5,800,000

Depreciation and amortization

18,900

116,960

120,000

Other expenses

340,000

720,000

612,960

Total operating costs

$3,222,900

$5,816,960

$6,532,960

EBIT

$209,100

$17,440

$502,640

Interest expense

62,500

176,000

80,000

EBT

$146,600

($158,560)

$422,640

Taxes (40%)

58,640

-63,424

169,056

Net income

$87,960

($95,136)

 

$253,584

Other Data

  

2012

2013

 

2014

Stock price

$8.50

$6.00

$12.17

Shares outstanding

100,000

100,000

250,000

EPS

$0.88

($0.95)

$1.104

DPS

$0.22

0.11

0.22

Tax rate

40%

40%

40%

Book value per share

$6.64

$5.58

$7.909

Lease payments

$40,000

   

$40,000

$40,000

 

 

Ratio Analysis

2012

2013

 

Industry Average

Current

2.3

1.5

2.7

Quick

0.8

0.5

1.0

Inventory turnover

4

4

6.1

Days sales outstanding

37.3

39.6

32.0

Fixed assets turnover

10

6.2

7.0

Total assets turnover

2.3

2

2.5

Debt ratio

35.60%

59.60%

32.0%

Liabilities-to-assets ratio

54.80%

80.70%

50.0%

TIE

3.3

0.1

6.2

EBITDA coverage

2.6

0.8

8.0

Profit margin

2.60%

−1.6%

3.6%

Basic earning power

14.20%

0.60%

17.8%

ROA

6.00%

−3.3%

9.0%

ROE

13.30%

−17.1%

17.9%

Price/Earnings (P/E)

9.7

−6.3

16.2

Price/Cash flow

8

27.5

7.6

Market/Book

1.3

1.1

2.9

2.  Suppose Congress changed the tax laws so that Berndt’s depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? 


3.  Calculate the 2014 current and quick ratios based on the projected balance sheet and income statement data. What can you say about the company’s liquidity position in 2013? 


6.  Calculate the 2014 profit margin, basic earning power (BEP), return on assets (ROA), and return on equity (ROE). What can you say about these ratios? 


7.  Calculate the 2014 price / earnings ratio, price / cash flow ratio, and market / book ratio. 


Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our Guarantees

101papers.com is always working towards customer satisfaction. Our professional academic writers always aim at producing comprehensive papers that possess quality and originality at pocket-friendly prices. Students are assured that all their private information is safe with us.

Money-Back Guarantee

101papers.com provides a system where students can request for money-back in case they cancel the order or in the rare instances of dissatisfaction. The refund policy adheres to the company’s term and conditions on money-back.

Read more

Zero-Plagiarism Guarantee

While providing the best professional essay writing services, we guarantee all our students of plagiarism-free papers. All papers produced by our professional academic writers are checked against all web resources and previously completed papers to avoid plagiarism.

Read more

Free Revision Policy

In our urge to provide the best professional essay writing services, we guarantee students of free revision policy. The free revision policy is a courtesy service where students can request for unlimited for their completed papers. We always aim at achieving 100% customer satisfaction rates. The free revision policy is one among many of our major advantages.

Read more

Privacy Policy

At 101papers.com, every student is entitled to total security. Our professional academic writers are always committed to protecting all private information of our customers. We do not share any personal information with third parties. Additionally, we provide safe systems for all online transactions.

Read more

Fair-Cooperation Guarantee

Working with us is the greatest step towards achieving all your academic goals. We always deliver the best professional essay writing services as promised. We, therefore, expect all students to work cooperatively with us, as we work towards achieving our goal, your satisfaction. This way, all services will be delivered accurately and on time.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency