The following data applies to GoodCorp. (in millions of US $): · Cash & marketable securities &n
- The following data applies to GoodCorp. (in millions of US $):
· Cash & marketable securities $315
· Fixed assets $546
· Net sales $2520
· Earnings Before Interests and Taxes (EBIT) $273
· Net Earnings After Taxes (NEAT ) $126
· Quick Ratio ((CA-Inventory)/CL) 2.1 to 1
· Current Ratio (CA/CL) 3.4 to 1
· Average Collection Period (ACP) 45.6 days
· Return on Equity (ROE, NEAT/Net Common Equity) 13%
· Tax rate 25%
On the Liabilities & Equity side, GoodCorp has only common equity, debt and current operating liabilities.
a. Find GoodCorp' (1) Accounts Receivables, (2) Current Operating Liabilities, (3) Current Assets, (4) Total Assets, (5) Net Common Equity, and (7) Debt. (10 points)
b. If GoodCorp managed to reduce its ACP by 15.60 days (to 30 days) while holding other things constant, how much cash could it generate? (10 points).
c. What is GoodCorp ROIC (post-tax) ? (10 points)
Homework Answers
The answer is divided into 3 sections and
part (a) contains 6 sub sections.
All of the questions relate with the accounting ratios used to forcast the companys financials.
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The following data applies to GoodCorp. (in millions of US
$):
· Cash
& marketable
securities &n
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what is the debt to campital ratio?
and
ROIC
and dividends per share
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what is the debt to campital ratio?
and
ROIC
and dividends per share
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