Which of the statements is correct?
Homework Answers
1. As per the given Cash Flow statement for Georgey Company, the Cash flow from Investing is relatively small compared to other cash flows making it evident that restructuring is not a top priority. The Account Receivables has decreased from 30 in 2004 to 20 in 2005. Also, Depreciation is not a major source of cash since maximum cash flows are generated through sale of equipment. Considering the amount of Long-Term Debt that is being paid off. The Leverage Ratio is definitely getting affecting as a good amount of cash from operations is being utilized for paying Long-Term Debt.
2. If the sales increased by 10% for the next 20 years, the current sales of $18500 would be compounded to 18500 X (1+10%)^20 = $124,459.
3.
| For Recorded Bad Debt Calculations | |||
| January | February | March | |
| Expected Sales | $ 200 | $ 220 | $ 300 |
| Cash Sales @ 50% | $ 100 | $ 110 | $ 150 |
| Receipts from prior month | $ 50 | $ 55 | |
| Receipts from two months prior | $ 40.0 | ||
| Uncollectible | $ 10.00 | $ 11.00 | $ 15.00 |
| For Gross Margin 20%, the cost of uncollectible would be | $ 8.33 | $ 9.17 | $ 12.50 |
| Hence, the recorded bad debt for March would be $ 12.50 | |||
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Which of the statements is correct?
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Balance Sheet Ratios for 2004
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Look closely at the Consolidated Condensed Statement of
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Is the Book Debt to Equity Ratio meaningful in
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Would the Market to Book Ratio be meaningful in
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Does the Negative Book Equity mean the
company is worthless to its shareholders in 2005? Explain your
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Comment on the profitability trends in their
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