1. The balance sheet consists of assets and liabilities and equity. With a focus on liabilities, ...
1. The balance sheet consists of assets and liabilities and equity. With a focus on liabilities, discuss the connectedness of these three components.
2. Discuss the components needed to determine the present value of a noncurrent liability.
3. Discuss the relationship between the income statement and the shareholders' equity section of the balance sheet.
4. Discuss the purpose of other comprehensive income and accumulated other comprehensive income.
5. Compare and contrast book value per share and market capitalization.
6. Evaluate the expected profitability and growth of a company with a price-tobook ratio of 1.4.
7. Which would you expect to find more useful financial statements for evaluating management performance: financial statements based on fair value or historic cost? Why?
Homework Answers
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1. The balance sheet consists of assets and liabilities and equity. With a focus on liabilities, ...
Bestvalue Airlines’ June 1, 2020 balance sheet is as follows (in thousands): Assets Liabilities & Equity...
Bestvalue Airlines’ June 1, 2020 balance sheet is as follows (in thousands): Assets Liabilities & Equity Cash $ 1,400 Current liabilities $ 3,200 Receivables 650 Long-term debt 5,000 Investments 1,000 Common stock, $0.01 par 1 Maintenance supplies 150 Additional paid-in capital 5,500 Flight equipment (net of $2,000 accumulated depreciation) 8,500 Retained earnings (deficit) (2,300) International routes 700 Accumulated other comprehensive income 1,999 ______ Treasury stock (1,000) Total assets $12,400 Total liabilities & equity $12,400 Safebuy Airlines acquired Bestvalue on...
a. What assets and liabilities of unconsolidated affiliates are omitted from Cummins’ balance sheet as a...
a. What assets and liabilities of unconsolidated affiliates are
omitted from Cummins’ balance sheet as a result of the equity
method of accounting for those investments?
b. Do the liabilities of the unconsolidated affiliates affect
Cummins directly? Explain
c. How does the equity method impact a company's ’ ROE and its
RNOA components (net operating asset turnover and net operating
profit margin)?
for part c-->
Note: My opinion is :
I guess the ROE is unaffected and for the RNOA...
Harrison, Inc., has the following book value balance sheet: Balance Sheet Assets Liabilities and equity Current...
Harrison, Inc., has the following book value balance sheet: Balance Sheet Assets Liabilities and equity Current assets $ 140,000,000 Total debt $ 250,000,000 Equity Common stock 30,000,000 Capital surplus 77,000,000 Net fixed assets 415,000,000 Accumulated retained earnings 198,000,000 Total shareholders' equity $ 305,000,000 Total assets $ 555,000,000 Total debt and shareholders' equity $ 555,000,000 a. What is the debt–equity ratio based on book values? b. Suppose the market value of the company's debt is...
Forecast Income Statement and Balance Sheet Following are the income statement and balance sheet for Medtronic...
Forecast Income Statement and Balance Sheet Following are the income statement and balance sheet for Medtronic PLC. April 26, 2019 $30,557 9,155 2,330 10,418 1,764 Consolidated Statement of Income, 12 Months Ended ($ millions) Net Sales Costs and expenses Cost of products sold Research and development expense Selling, general, and administrative expense Amortization of intangible assets Restructuring charges, net Certain litigation charges Other operating expense, net Operating profit Other nonoperating income, net Interest expense Income before income taxes Income tax...
AGEC 3423 HW2 Spring 2020 1. True or false? Assets + Liabilities = Owner's Equity. Why?...
AGEC 3423 HW2 Spring 2020 1. True or false? Assets + Liabilities = Owner's Equity. Why? (1 pt) 2. True or false? If the debt/equity ratio increases, the debt/asset ratio will also increase Why? (3pts) 3. True or false? A business with a higher working capital will also have a higher current ratio. Why? (3pts) 4. Use your knowledge of balance sheets and ratio analysis to complete the following abbreviated balance sheet. The current ratio = 2.0, and the debt/equity...
a)What assets and liabilities of unconsolidated affiliates are omitted from Cummins’ balance sheet as a result...
a)What assets and liabilities of unconsolidated affiliates are
omitted from Cummins’ balance sheet as a result of the equity
method of accounting for those investments?
b. Do the liabilities of the unconsolidated affiliates affect
Cummins directly? Explain.
For part a) I have solved it but I am a little confused. Please
clarify .
Assets = Current Assets + Non - Current Assets = 2458 + 1539 =
3997. Out of this, 958 million $ of assets are Cummin's share of...
The current asset section of the Excalibur Tire Company's balance sheet consists of cash, marketable securities, accoun...
The current asset section of the Excalibur Tire Company's balance sheet consists of cash, marketable securities, accounts receivable, and inventories. The December 31, 2016, balance sheet revealed the following: Inventories $ 840,000 Total assets $2,800,000 Current ratio 2.25 Acid-test ratio 1.2 Debt to equity ratio 1.8 Required: Determine the following 2016 balance sheet items: Current assets Shareholders' equity Noncurrent assets Long-term liabilities
Here is a simplified balance sheet for Locust Farming: Current assets Long-term assets Locust Farming Balance...
Here is a simplified balance sheet for Locust Farming: Current assets Long-term assets Locust Farming Balance Sheet ($ in millions) $ 42,534 Current liabilities 46,852 Long-term debt Other liabilities Equity $ 89,386 Total $ 29,745 27,762 14,337 17,542 $ 89,386 Total Locust has 667 million shares outstanding with a market price of $93 a share. a. Calculate the company's market value added. (Enter your answers in millions.) Market value million Market value added million b. Calculate the market-to-book ratio. (Round...
Perform a horizontal analysis of the balance sheet of the Fortune 500 company, Apple. Then please...
Perform a horizontal analysis of the balance sheet of the
Fortune 500 company, Apple. Then please summarize the balance sheet
results of the horizontal analysis. Simply select some of the
higher or lower %s to discuss. Focus on items you feel are more
relevant and telling of the company operations. For example, you
could write one paragraph on each section of the balance sheet i.e.
assets, liabilities, equity.
Please use the following balance sheets.
Apple Inc. CONSOLIDATED BALANCE SHEETS (In...
Financial instruments that are not listed on the balance sheet of a company may involve significant...
Financial instruments that are not listed on the balance sheet of a company may involve significant risks that must be disclosed in the notes to the financial statements. are reported as assets if the company can determine the fair value. must be reported as a liability on the balance sheet at the end of the accounting period. O must be reported on the income statement. D Question 10 2 pts Countries throughout the world typically pay extremely large dividends to...
a. What assets and liabilities of unconsolidated affiliates are
omitted from Cummins’ balance sheet as a result of the equity
method of accounting for those investments?
b. Do the liabilities of the unconsolidated affiliates affect
Cummins directly? Explain
c. How does the equity method impact a company's ’ ROE and its
RNOA components (net operating asset turnover and net operating
profit margin)?
for part c-->
Note: My opinion is :
I guess the ROE is unaffected and for the RNOA...
Forecast Income Statement and Balance Sheet Following are the income statement and balance sheet for Medtronic PLC. April 26, 2019 $30,557 9,155 2,330 10,418 1,764 Consolidated Statement of Income, 12 Months Ended ($ millions) Net Sales Costs and expenses Cost of products sold Research and development expense Selling, general, and administrative expense Amortization of intangible assets Restructuring charges, net Certain litigation charges Other operating expense, net Operating profit Other nonoperating income, net Interest expense Income before income taxes Income tax...
AGEC 3423 HW2 Spring 2020 1. True or false? Assets + Liabilities = Owner's Equity. Why? (1 pt) 2. True or false? If the debt/equity ratio increases, the debt/asset ratio will also increase Why? (3pts) 3. True or false? A business with a higher working capital will also have a higher current ratio. Why? (3pts) 4. Use your knowledge of balance sheets and ratio analysis to complete the following abbreviated balance sheet. The current ratio = 2.0, and the debt/equity...
a)What assets and liabilities of unconsolidated affiliates are
omitted from Cummins’ balance sheet as a result of the equity
method of accounting for those investments?
b. Do the liabilities of the unconsolidated affiliates affect
Cummins directly? Explain.
For part a) I have solved it but I am a little confused. Please
clarify .
Assets = Current Assets + Non - Current Assets = 2458 + 1539 =
3997. Out of this, 958 million $ of assets are Cummin's share of...
Here is a simplified balance sheet for Locust Farming: Current assets Long-term assets Locust Farming Balance Sheet ($ in millions) $ 42,534 Current liabilities 46,852 Long-term debt Other liabilities Equity $ 89,386 Total $ 29,745 27,762 14,337 17,542 $ 89,386 Total Locust has 667 million shares outstanding with a market price of $93 a share. a. Calculate the company's market value added. (Enter your answers in millions.) Market value million Market value added million b. Calculate the market-to-book ratio. (Round...
Perform a horizontal analysis of the balance sheet of the
Fortune 500 company, Apple. Then please summarize the balance sheet
results of the horizontal analysis. Simply select some of the
higher or lower %s to discuss. Focus on items you feel are more
relevant and telling of the company operations. For example, you
could write one paragraph on each section of the balance sheet i.e.
assets, liabilities, equity.
Please use the following balance sheets.
Apple Inc. CONSOLIDATED BALANCE SHEETS (In...
Financial instruments that are not listed on the balance sheet of a company may involve significant risks that must be disclosed in the notes to the financial statements. are reported as assets if the company can determine the fair value. must be reported as a liability on the balance sheet at the end of the accounting period. O must be reported on the income statement. D Question 10 2 pts Countries throughout the world typically pay extremely large dividends to...
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