12
33. Refer to Exhibit 19-2. What was Star’s quick ratio for 2009?
a.
0.11
b.
0.44
c.
0.38
d.
0.74
e.
0.98
34. Refer to Exhibit 19-2. What was Star’s interest coverage for 2009?
a.
4.99
b.
2.58
c.
3.48
d.
5.16
e.
6.02
35. Refer to Exhibit 19-2. What was Star’s total asset turnover for 2009?
a.
1.65
b.
1.21
c.
0.92
d.
0.033
e.
0.70
36. Refer to Exhibit 19-2. What was Star’s current ratio at year-end 2009?
a.
1.59
b.
1.00
c.
0.82
d.
0.74
e.
0.33
13
37. Refer to Exhibit 19-2. What was Star’s net profit margin?
a.
2.4%
b.
3.8%
c.
4.2%
d.
4.7%
e.
5.2%
38. Refer to Exhibit 19-2. What was Star’s fixed asset turnover ratio?
a.
1.65
b.
1.21
c.
1.01
d.
0.82
e.
0.42
39. Refer to Exhibit 19-2. What was the financial leverage multiplier used in the Star system?
a.
0.852
b.
1.896
c.
1.996
d.
2.054
e.
2.998
40. Refer to Exhibit 19-2. What is Star’s traditional cash flow?
a.
81
b.
72
c.
51
d.
102
e.
131
14
41. Refer to Exhibit 19-2. What is Star’s operating profit margin?
a.
0.104
b.
0.094
c.
0.084
d.
0.067
e.
0.047
Exhibit 19-3
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
You are provided with the following information for a company.
Net Annual Sales
60000
Average Receivables
1200
COGS
35000
Average Inventory
3000
Average Trade Payables
1500
42. Refer to Exhibit 19-3. Calculate the receivables turnover ratio.
a.
50
b.
25
c.
55
d.
36
e.
27
43. Refer to Exhibit 19-3. Calculate the inventory turnover ratio.
a.
27.23
b.
23.3
c.
55.43
d.
8.67
e.
11.67
15
44. Refer to Exhibit 19-3. Calculate the payables turnover ratio.
a.
30.3
b.
23.3
c.
55.4
d.
11.6
e.
56.6
45. Refer to Exhibit 19-3. Calculate the cash conversion cycle.
a.
27
b.
46
c.
27
d.
55
e.
22
Exhibit 19-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
You are provided with the following information about MaxCorp.
Net sales
5000
Total Assets
3000
Depreciation
260
Net Income
600
Long term Debt
2000
Equity
2160
Dividends
160
46. Refer to Exhibit 19-4. Calculate the return on equity (ROE).
a.
20.4%
b.
17.8%
c.
22.4%
d.
27.8%
e.
30.4%
16
47. Refer to Exhibit 19-4. Calculate the sustainable growth rate.
a.
27.8%
b.
30.4%
c.
20.4%
d.
27.8%
e.
17.8%
Exhibit 19-5
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
You are provided with the following information about Albermarle Corp.
Income Statement Data
Sales
542
Operating Income
38
Depreciation
3
Interest Expense
3
Pretax Income
32
Income Taxes
13
Net Income after tax
19
Balance Sheet Data
Fixed Assets
41
Total Assets
245
Working Capital
123
Total Debt
16
Equity
159
48. Refer to Exhibit 19-5. Calculate the operating margin.
a.
15.5%
b.
5.6%
c.
8.6%
d.
10.6%
e.
6.5%
17
49. Refer to Exhibit 19-5. Calculate the asset turnover ratio.
a.
2.2
b.
5.6
c.
4.2
d.
2.9
e.
3.9
50. Refer to Exhibit 19-5. Calculate the interest expense rate.
a.
7%
b.
0.5%
c.
1.2%
d.
5%
e.
2.3%
51. Refer to Exhibit 19-5. Calculate the financial leverage.
a.
1.05
b.
5.32
c.
2.15
d.
1.54
e.
2.31
52. Refer to Exhibit 19-5. Calculate the income tax rate.
a.
40.6%
b.
25.6%
c.
16.8%
d.
28.9%
e.
44.9%
18
53. Refer to Exhibit 19-5. Calculate the return on equity (ROE).
a.
15%
b.
12%
c.
32%
d.
9%
e.
7%
Exhibit 19-6
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
You are provided with the following information for the Klandy Corporation.
2008
2009
Net Income
$1200
$1500
Depreciation
$200
$300
Total Current Assets
$700
$900
Total Current Liabilities
$500
$800
During 2009 Klandy Corp. made capital expenditures totaling $500 and disposed property worth $400.
54. Refer to Exhibit 19-6. What is the firm’s cash flow from operating activities for the year 2009?
a.
$2100
b.
$1900
c.
$1800
d.
$1700
e.
$1600
55. Refer to Exhibit 19-6. What is the firm’s free cash flow?
a.
$2100
b.
$1900
c.
$1800
d.
$1700
e.
$1600
19
Exhibit 19-7
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
You are provided with the following information for the Nelson Corporation.
2008
2009
Net Income
$1500
$2000
Depreciation
$200
$475
Total Current Assets
$700
$900
Total Current Liabilities
$500
$800
During 2009 Nelson Corp. made capital expenditures totaling $500 and disposed property worth $800.
56. Refer to Exhibit 19-7. The firm’s cash flow from operating activities for the year 2009 is
a.
$2200
b.
$2575
c.
$2325
d.
$2875
e.
$1900
57. Refer to Exhibit 19-7. What is the firm’s free cash flow?
a.
$2200
b.
$1900
c.
$2875
d.
$2325
e.
$2575
20
Exhibit 19-8
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
Zeco Company has the following financial statements for year ending 12/31/2009.
Sales
1,000,000
Cost of Goods Sold
750,000
Gross Profit
250,000
Depreciation
100,000
Operating Expenses
70,000
Administration Exp.
65,000
Operating Profit
15,000
Interest Expense
8,000
Profit Before Taxes
7,000
Taxes
2,800
Net Income
4,200
Dividends
3,200
Assets
Liabilities
Cash
50,000
Notes Payable
250,000
Accounts Receivable
250,000
Accounts Payable
350,000
Inventory
325,000
Total Current Liab.
800,000
Total Current Assets
825,000
Long Term Debt
225,000
Net Fixed Assets
450,000
Common Stock
200,000
Total Assets
1,275,000
Retained Earnings
50,000
Total Liab. & Earnings
1,275,000
The Zeco Company’s industry averages are as follows:
Net Profit Margin = 4.5%; Total Asset Turnover = 0.8; Total Assets/ Equity = 1.5
58. Refer to Exhibit 19-8. Calculate Zeco Company’s Net Profit Margin.
a.
0.42%
b.
0.97%
c.
1.50%
d.
19.60%
e.
25.00%
59. Refer to Exhibit 19-8. Calculate Zeco Company’s Total Asset Turnover.
a.
0.59
b.
0.78
c.
1.28
d.
1.70
e.
1.97
21
60. Refer to Exhibit 19-8. Calculate Zeco Company’s Total Assets/Equity ratio.
a.
5.1
b.
6.1
c.
6.4
d.
8.7
e.
25.5
61. Refer to Exhibit 19-8. Calculate the return on equity (ROE) for Zeco Company and the Industry.
Zeco
Industry Average
I.
1.52%
0.55%
II.
1.68%
5.40%
III.
2.10%
1.80%
IV.
6.00%
5.40%
V.
8.40%
9.32%
a.
I
b.
II
c.
III
d.
IV
e.
V
62. Refer to Exhibit 19-8. Calculate the sustainable growth rate for Zeco Company.
a.
0.4%
b.
0.7%
c.
1.3%
d.
2.1%
e.
4.1%
22
63. Refer to Exhibit 19-8. Based on this information what are the strengths and concerns of Zeco
Company?
a.
Zeco needs to lower its leverage and improve profitability and efficiency.
b.
Zeco needs to increase its leverage and improve efficiency.
c.
Zeco needs to lower its leverage and improve efficiency.
d.
Zeco needs to lower its leverage and improve profitability.
e.
Zeco needs to increase its leverage and improve profitability.