Financial Management

Description

What kind of financial information is a publicly-traded company required to provide to its stockholders? Which financial statement do you think provides the best information for investors?

Differentiate (compare) among the information that is provided in each of the following financial statements: (1) balance sheet, (2) income statement, and (3) statement of cash flows.

Discuss some of the limitations associated with performing ratio (financial statement) analysis. What is the most important ingredient (input) in completing ratio analysis? Explain why.

Robust Robots (RR) recently issued 100,000 shares of common stock at $7 per share. The stock has a par value equal to $3 per share. What amount of the $700,000 that RR raised should be reported in the “Common stock at par” account, and what amount should be reported in the “Paid-in capital” account?

Crooked Golf’s most recent income statement shows that net income was $90,000, depreciation was $25,000, and taxes were $60,000. What was Crooked Golf’s net cash flow?

Duncan Boutique’s total assets are $440,000, its return on assets (ROA) is 8 percent, and its debt ratio is 20 percent. What are Duncan’s (a) net income and (b) return on equity (ROE)?

Horatio’s Hot Dogs’ current assets equal $260,000. The company’s return on assets (ROA) is 4 percent, its net income is $140,000, its long-term debt equals $1,755,000, and 35 percent of its assets are financed with common equity. Horatio’s has no preferred stock. Compute the company’s current ratio.

Fido’s Dog Spa’s financial statements show that its total assets equal $100,000, its return on assets (ROA) is 3 percent, and its return on equity (ROE) is 5 percent. (a) Compute the company’s net income. (b) What portion of total assets is financed with debt? Fido’s has no preferred stock.

Sixty (60) percent of Extreme Well Drilling’s assets are financed with common equity, which is the only type of equity financing the company has. Extreme’s current ratio is 5.0, its total assets turnover is 4.0, current assets equal $150,000, and its sales equal $1,800,000. What amount of Extreme’s total liabilities is long term, and what amount is short term (current liabilities)?

North/South Airlines generated the following information from its financial statements: (1) P/E ratio equals 15.0, (2) common stock market price per share is $30, (3) fixed assets turnover equals 8.0, (4) current ratio equals 5.0, (5) current liabilities equal $300,000, (6) net profit margin equals 4 percent, and (7) 60,000 shares of common stock are outstanding. What are North/South’s (a) return on assets (ROA) and (b) total a