Question

i need help with my statement analysis class

The balance sheet for Decenbex 31. 2002, and Decenbex 31, 2003, and the income statenent for the year ended Decenber 31, 2002, ot Growth Company follow Asset cash Accounts receivable, net Inventory 70,000 90,000 95, 000 80,000 Building and equipment Total assets Liabilities and Stockholdera Equity Accounts payable Income taxes payable Wages payable Current notes payable Common stock Retained earninga s 40,000 S 35, 000 7,000 40, 000 120,000 60, 000 110,000 Total liabilities and stockholders Equity Growth Company Income Statement For the Year Ended December 31, 2002 Sales Less expenses 460,000) Cost of goods sold Selling and administrative expenses (includes depreciation of $10, 000) (120,000) Interest expense Income before incone taxes Income tax expense Net income 000) Note: Cash dividends of $17,000 were paid during 2002 t a. Prepare the statement of cash flows for 2002. (Present cash flows from operations using the indirect approach.) b. Compute the ratio cash flow/current maturities of long- Required: term debt and current notes payable 230 -Computation of Z score The following data are presented for Data Company Variable working capital Total assets Retained earnings Earnings before interest and taxes Market value of equity Book value of total debt Sales 90.000 620,000 S 30,000 55.000 $100,000 S280,000 440.000 z score formula: X1 = working capital / Total Assets X2 = Retained Earnings (balance sheet)/Total Assets X3 = Earnings Before Interest and Taxes /Total Assets xMarket Value of Equity/Book Value of Total Debt 3Sales/Total Assets Required: a. Compute the 2 score for the Data Company likelihood that this firm will experience financial failures b. Considering the Altman mode1. comment on the 247 Name of tim Rocket Company Current assets Total ansets Current liabi1itien Book value of total debt Retained earnings Sales Earnings before interest and tax Market value of stock Number of shares outstanding 30,000 88,000 s 18, 000 538,000 s 42,000 $125,000 s22,000 30 8,000 Requireds Compute the z score for Rocket Company

Answer 1

a.Cashflow Statement

Cashf low Statement Aont Amau 及tada rs a lo fen Spering Adwhes Net Income afte tox 39,000 10, Add: Depre cioti om Povision for tox expense 25,000 Decvcase n inve ntory 5, ooD Incxcase in wrayable less: Deitale n Nuounts pouyable 5oo less: Decrtave n Acounts payable 5000) crease in Cuen tan Clesing bal ) Cashtlow fem (20000) nane Pao coeds of ssue ot common stuck o,000 Cash divident paid (14,000) | (チ7000) Net Cashfloos duting the yai 2o sOpening Cask Balance ラ! lo,000 OOo closing danh Balance 7 4900

b. Ratio of cash flow/current maturities of long term debts and current notes payable = 10,000/40,000 = 0.25

2.
a (a) hasking Capital toooo 2 olu 11%. Total Assets 620000 Retained Earnings 2 39000 , 005 5 ./. Total Ass620 00o tarung, before "Soterest To tal Assets SS,000 629000 taxes 9-1 "X 3 Moaket ale of 2 Book vau d total det 28000o Sales 2X S o tal Assets 610 000 2コ 0. 012 (I 4) +0.olu (5) to.o33(9)+0ool(3L)teaD(H) 1, 461 ア

Sinue the Altman z scoe the Compawy re, 1, 4 GI İslon than 1,8, the Compa.my will ptnthe uture decdare bankau

3.

3. (a) Z scove Hor Rocket Coma x, Total Assets 石tal Assets 88jooo 27 000 Total Assets 22,000 225./ 8800D 73つtaonings befochtereitetaxes ろ To tal Assets Market value of Equity 30x8000, 6325 3200to Book value of total debt As Sale 2 0. 012 (u) +o o Iu (u) +o 033(as) + D.00 (631) +0010(142) 6.84 Since the Aitmon 2 coreRocket Compony 687ヲ as guestee thon 3, the company wi Mot declave bntaupt