Homework Answers
a. First of all we have to find EBIT. EBIT is operating profit.
Net operating profit after taxes=EBIT*(1-tax rate)
EBIT=Net operating profit after taxes/(1-tax rate)=450,000/(1-25%)=600,000
Interest coverage ratio=EBIT/Interest expenses=$600,000/$100,000=6.0x
b.Long term debt can be found using the following equation
Total assets=Total Liabilities+equity
$1,000,000=(Current liabilities+short term debt +long term debt)+600,000
400,000=(150,000+0+long term debt)
long term debt=$250,000
c.Equity multiplier ratio=Total assets/Total equity=$1,000,000/$600,000=1.67x
d. The total assets increase to 1250000 after the new long term debt issue=(50%/40%)*1,000,000
40% is the existing share of current liabilities and long term debt
Out of 1250000, current liabilities and debt should not exceed 50%
Maximum would be=50%*1250000=$625,000
Out of this $625,000, current liabiities value is $150,000. The maximum long term debt that can be used for funding is $475,000 ($625,000-$150,000)
Add Answer to:
1. Consider the following: net operating profit after taxes = $450,000, total assets = $1,000,000, interest...
rch the menus (A-T) Average Daily Operating Costs Total Assets- Total Equity Total Assets Total Debt...
rch the menus (A-T) Average Daily Operating Costs Total Assets- Total Equity Total Assets Total Debt Ratio Total Debt 4, Debt- Equity Ratio Total Equity 4Equity Multiplier Total Assets Total Equity 3,4: 241 26 Long-term Debt Ratio Long-Term Debt3.011 Long-Term Debt+ Total Equity 9.09 29 Times Interest Earned Ratio 30 EBIT Interest 398.5 3,821, Cash Coverage Ratio EBITt Depreciationl (39857 Interest (382110 Cost of Goods Sold NA Inv 976,600 Inventory Turnover Inventory Period Ending 9/30/2018 Current Assets Cash And Cash...
Q.9 The balance sheet for Solomon Corporation follows: Current assets $ 237,000 Long-term assets (net) 752,...
Q.9
The balance sheet for Solomon Corporation follows:
Current assets
$
237,000
Long-term assets (net)
752,000
Total assets
$
989,000
Current liabilities
$
156,000
Long-term liabilities
450,000
Total liabilities
606,000
Common stock and retained earnings
383,000
Total liabilities and stockholders’ equity
$
989,000
Required
Compute the following. (Round "Ratios" to 1 decimal
place.)
Working capital Current ratio Debt-to-assets ratio Debt-to-equity ratio
524257 374554 10000 5000 29408 1000 Sales Operating Costs Depreciation Expense Interest Expense Tax Expense Cash...
524257 374554 10000 5000 29408 1000 Sales Operating Costs Depreciation Expense Interest Expense Tax Expense Cash Receivables Inventories Fixed Assets, Net Payables Accrued Expenses Long-Term Loan Common Equity 30000 62425 50000 11000 10000 50000 72425 Assignment: Prepare an income statement and a balance sheet for is company using the information provided. Calculate: 1. Current ratio 2. Quick ratio 3. NWC-to-total-Assets (Working capital to assets) 4. Ratio of total debt and liabilities to total assets 5. Ratio of total debt and...
Consider this simplified balance sheet for Geomorph Trading: $ Current assets Long-term assets $ 120 520...
Consider this simplified balance sheet for Geomorph Trading: $ Current assets Long-term assets $ 120 520 70 270 Current liabilities Long-term debt Other liabilities Equity 90 $ 640 210 $ 640 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.) b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.) c. What is its net working capital? d. What is its current ratio? (Round...
The balance sheet for Fanning Corporation follows: Current assets 237,000 Long-term assets (net) 757,000 Total assets...
The balance sheet for Fanning Corporation follows: Current assets 237,000 Long-term assets (net) 757,000 Total assets $994,000 Current liabilities $146,000 Long-term liabilities 443,000 Total liabilities 589,000 Common stock and retained earnings 405,000 Total liabilities and stockholders' equity $994,000 Compute the following. (Round "Ratios" to 1 decimal place.) Working capital Current ratio Debt to assets ratio Debt to equity ratio
Balance sheet ($ millions) Cash $50 Other current assets $100 Long term assets, $120 net Total assets $270 Noninterest b...
Balance sheet ($ millions) Cash $50 Other current assets $100 Long term assets, $120 net Total assets $270 Noninterest bearing short term debt $60 Short term debt (10%) 10 Senior long-term debt 0 Subordinated debt Equity 0 Total Liabilities & Equity $270 Interest Coverage Net Operating Income $30 Interest Expense Short term debt $1 Senior long term debt $0 - Subordinated debt $0 Total $1 NOI/Interest expense $30 Effective tax rate 30 % Depreciation $20 Create a basic income statement...
The balance sheet for Jordan Corporation follows: Current as sets $ 250,000 766,000 Long-term assets (net)...
The balance sheet for Jordan Corporation follows: Current as sets $ 250,000 766,000 Long-term assets (net) Total assets $1,016,000 Current liabilities $ 155,000 445,000 600,000 416,000 Long-term liabilities Total liabilities Common stock and retained earnings Total liabilities and stockholders' equity $1,016,000 Required Compute the following. (Round "Ratios" to 1 decimal place.) Working capital Current ratio % Debt to assets ratio Debt to equity ratio
The balance sheet for Fanning Corporation follows: Current assets $232,000 763,000 Long-term assets (net) Total assets...
The balance sheet for Fanning Corporation follows: Current assets $232,000 763,000 Long-term assets (net) Total assets $995,000 Current liabilities $153,000 460,000 613,000 382,000 Long-term liabilities Total liabilities Common stock and retained earnings Total liabilities and stockholders' equity $995,000 Required Compute the following. (Round "Ratios" to 1 decimal place.) Working capital Current ratio % Debt to assets ratio Debt to equity ratio
The balance sheet for Munoz Corporation follows: Current assets Long-term assets (net) Total assets Current liabilities...
The balance sheet for Munoz Corporation follows: Current assets Long-term assets (net) Total assets Current liabilities Long-term liabilities Total liabilities Common stock and retained earnings Total liabilities and stockholders' equity $ 235,000 762,000 $997,000 $160,000 457,000 617,000 380,000 $997,000 Required Compute the following. (Round "Ratios" to 1 decimal place.) ace Working capital Current ratio Debt to assets ratio Debt to equity ratio
Calculate the following: - Net income - Operating income - Total assets - Total Liabilities -...
Calculate the following:
- Net income
- Operating income
- Total assets
- Total Liabilities
- Total stockholders equity
- Gross revenue
- Net revenue
- Operating margin ratio
- Net profit margin ratio
- Estimated cash flow
- Times interest earned ratio
Prestige Worldwide - Trial balance as of December 31, 2018: Gross Service Revenue $ 115,981,250 Bad Debt Expense 2,655,000 (3,575,000) Discounts on Sales Salaries $ 55,825,000 Benefits 14,178,292 Administrative 4,342,500 Insurance 325,000 Interest 164,575 Depreciation 3,200,000 Maintenanсe...
rch the menus (A-T) Average Daily Operating Costs Total Assets- Total Equity Total Assets Total Debt Ratio Total Debt 4, Debt- Equity Ratio Total Equity 4Equity Multiplier Total Assets Total Equity 3,4: 241 26 Long-term Debt Ratio Long-Term Debt3.011 Long-Term Debt+ Total Equity 9.09 29 Times Interest Earned Ratio 30 EBIT Interest 398.5 3,821, Cash Coverage Ratio EBITt Depreciationl (39857 Interest (382110 Cost of Goods Sold NA Inv 976,600 Inventory Turnover Inventory Period Ending 9/30/2018 Current Assets Cash And Cash...
Q.9
The balance sheet for Solomon Corporation follows:
Current assets
$
237,000
Long-term assets (net)
752,000
Total assets
$
989,000
Current liabilities
$
156,000
Long-term liabilities
450,000
Total liabilities
606,000
Common stock and retained earnings
383,000
Total liabilities and stockholders’ equity
$
989,000
Required
Compute the following. (Round "Ratios" to 1 decimal
place.)
Working capital Current ratio Debt-to-assets ratio Debt-to-equity ratio
524257 374554 10000 5000 29408 1000 Sales Operating Costs Depreciation Expense Interest Expense Tax Expense Cash Receivables Inventories Fixed Assets, Net Payables Accrued Expenses Long-Term Loan Common Equity 30000 62425 50000 11000 10000 50000 72425 Assignment: Prepare an income statement and a balance sheet for is company using the information provided. Calculate: 1. Current ratio 2. Quick ratio 3. NWC-to-total-Assets (Working capital to assets) 4. Ratio of total debt and liabilities to total assets 5. Ratio of total debt and...
Consider this simplified balance sheet for Geomorph Trading: $ Current assets Long-term assets $ 120 520 70 270 Current liabilities Long-term debt Other liabilities Equity 90 $ 640 210 $ 640 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB a. What is the company's debt-equity ratio? (Round your answer to 2 decimal places.) b. What is the ratio of total long-term debt to total long-term capital? (Round your answer to 2 decimal places.) c. What is its net working capital? d. What is its current ratio? (Round...
The balance sheet for Jordan Corporation follows: Current as sets $ 250,000 766,000 Long-term assets (net) Total assets $1,016,000 Current liabilities $ 155,000 445,000 600,000 416,000 Long-term liabilities Total liabilities Common stock and retained earnings Total liabilities and stockholders' equity $1,016,000 Required Compute the following. (Round "Ratios" to 1 decimal place.) Working capital Current ratio % Debt to assets ratio Debt to equity ratio
The balance sheet for Fanning Corporation follows: Current assets $232,000 763,000 Long-term assets (net) Total assets $995,000 Current liabilities $153,000 460,000 613,000 382,000 Long-term liabilities Total liabilities Common stock and retained earnings Total liabilities and stockholders' equity $995,000 Required Compute the following. (Round "Ratios" to 1 decimal place.) Working capital Current ratio % Debt to assets ratio Debt to equity ratio
The balance sheet for Munoz Corporation follows: Current assets Long-term assets (net) Total assets Current liabilities Long-term liabilities Total liabilities Common stock and retained earnings Total liabilities and stockholders' equity $ 235,000 762,000 $997,000 $160,000 457,000 617,000 380,000 $997,000 Required Compute the following. (Round "Ratios" to 1 decimal place.) ace Working capital Current ratio Debt to assets ratio Debt to equity ratio
Calculate the following:
- Net income
- Operating income
- Total assets
- Total Liabilities
- Total stockholders equity
- Gross revenue
- Net revenue
- Operating margin ratio
- Net profit margin ratio
- Estimated cash flow
- Times interest earned ratio
Prestige Worldwide - Trial balance as of December 31, 2018: Gross Service Revenue $ 115,981,250 Bad Debt Expense 2,655,000 (3,575,000) Discounts on Sales Salaries $ 55,825,000 Benefits 14,178,292 Administrative 4,342,500 Insurance 325,000 Interest 164,575 Depreciation 3,200,000 Maintenanсe...
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