Homework Answers
(a) Current Ratio = Current Assets / Current Liabilities
Current Assets in 2018 = $ 770
Current Liabilities in 2018 = $ 395
Current Ratio = 770/395
= 1.94
(b) Debt To Total assets ratio = Total Debt / Average Total Assets
Total Debt 2018 = Total Current liabilities + Total long term debt
= 395+450
= 845
Average Total Assets in 2018 = 2770
Debt to total assets ratio = 845/2770*100
= 30.50%
If the industry average is 30% then Roshnan's creditors have a smaller cushion than indicated by the industry average as its debt to total assets ratio = 30.50% which is higher/equal to 30%.
(c) Net Profit Margin = Earnings after interest & taxes (EAT) / Net sales
Earnings after interest & taxes of 2018 = 353 (Given)
Net sales = 2000
Net Profit Margin = 353/2000*100
= 17.65%
(d) False as Rosnan's debt to total assets ratio is equal to industry average.
(e) Price -Earning ratio = market price of share / EPS
market price per share = 25 (Given)
Earnings per share = Net profit available to equity holders/No. of common stock outstanding
= 353/100
= 3.53
P/E Ratio = 25/3.53
= 7.08
Under Du-pont Equation ROE = Earnings after taxes/Sales*Sales/Total Assets
= EAT/Total Assets
EAT in 2018 = 353
Total Assets = 2770
ROE = 353/2770
= 12.74%
Please check with your answer and let me know.
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$105 Quantitative Problem: Rosnan Industries' 2018 and 2017 balance sheets and income statements are shown below....
Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance...
Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: 2019 $ 90 275 Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets 375 $ 740 2,000 $2,740 2018 $ 75 300 350 $ 725 1,490 $2,215 Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Income Statements: $ 150 75 140 $ 365 450 1,225 700 $2,740...
Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance...
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Quantitative Problem: Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All o...
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Quantitative Problem: Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All o...
Quantitative Problem: Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset. Balance Sheets: 2016 2017 $100 $85 Cash and equivalents 200 Accounts receivable 275 375 250 Inventories $750 $635 Total current assets 2,000 1,490 Net plant and equipment $2,750 $2,125 Total assets $85 $150 Accounts payable 50 75 Accruals 75 150 Notes payable $210 $375 Total current liabilities 290 450 Long-term debt 1,225 1,225...
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Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the...
Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset. Balance Sheets: 2017 2016 Cash and equivalents $100 $85 Accounts receivable 275 200 Inventories 375 250 Total current assets $750 $635 Net plant and equipment 2,000 1,490 Total assets $2,750 $2,125 Accounts payable $150 $85 Accruals 75 50 Notes payable 150 75 Total current liabilities $375 $210 Long-term debt 450 290 Common stock 1,225 1,225 ...
Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are shown below. Balance...
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Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below. The balance in...
Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below. The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2013 free cash flow (FCF)? Use a minus sign to indicate a negative FCF. $
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Quantitative Problem: Rosnan Industries' 2019 and 2018 balance sheets and income statements are shown below. Balance Sheets: 2019 $ 90 275 Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets 375 $ 740 2,000 $2,740 2018 $ 75 300 350 $ 725 1,490 $2,215 Accounts payable Accruals Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity Income Statements: $ 150 75 140 $ 365 450 1,225 700 $2,740...
Quantitative Problem: Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset. Balance Sheets: 2017 2016 Cash and equivalents $100 $85 Accounts receivable 275 200 Inventories 375 250 Total current assets $750 $635 Net plant and equipment 2,000 1,490 Total assets $2,750 $2,125 $150 $85 Accounts payable 75 50 Accruals 75 150 Notes payable $210 $375 Total current liabilities 450 290 Long-term debt 1,225 1,225...
Quantitative Problem: Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset. Balance Sheets: 2016 2017 $100 $85 Cash and equivalents 200 Accounts receivable 275 375 250 Inventories $750 $635 Total current assets 2,000 1,490 Net plant and equipment $2,750 $2,125 Total assets $85 $150 Accounts payable 50 75 Accruals 75 150 Notes payable $210 $375 Total current liabilities 290 450 Long-term debt 1,225 1,225...
Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are shown below. Balance Sheets: 2020 2019 $100 Assets Cash and equivalents Accounts receivable Inventories Total current assets Net plant and equipment Total assets $85 300 250 275 375 $750 2,300 $3,050 $635 1,490 $2,125 $150 $85 75 50 75 $210 Liabilities and Equity Accounts payable Accruals Notes payable Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total common equity Total liabilities and equity 150...
Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below. The balance in the firm's cash and equivalents account is needed for operations and is not considered "excess" cash. Using the financial statements given above, what is Rosnan's 2013 free cash flow (FCF)? Use a minus sign to indicate a negative FCF. $
Tying the Ratios Together The DuPont equation shows the relationships among asset management, debt managem ent, and i profitability improving the firm's performance. Its equation is: ratios. Management can use the DuPont equation to analyze ways of ROE Profit margin x Totał assets turnover x Equity multiplier Ratio analysis is important to understand and interpret financial statements; however, sound financial analysis involves more than just calculating and interpreting numbers. Qualitative factors also need to be considered Hide Feedbachk Correct Quantitative...
SMOLIRA GOLF CORP 2017 and 2018 Balance Sheets Assets Liabilities and Owners' Equity 2017 2018 2017 2018 Current assets Accounts Inventory Total Current liabilities $ 24,076 12,748 25,742 24,400Accounts payable 23,48427400 1,100 17,500 Cash 15,500 27,400 Notes payable Other 13,000 receivable 11,871 48,35556,000 $72,00085,616 $62,566 67,300 Total Long-term debt Owners' equity Common stock and paid-in s 45,000 45,000 224,906243,384 Accumulated retained earnings Fixed assets Net plant and equipment $269,906$288,384 $327,695 $362,700 Total $430,000 equity Total liabilities and owners'$390,261 $430,000 Total...
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