Use the provided Excel template to submit your responses to each of the study problems from the textbook below:
- 3-13, p. 72. Review of financial statements
- 3-15, p. 73. Analyzing the cash flow statement
- 4-25, p. 116. Calculating financial ratios
Each question has a corresponding worksheet (look for the tab along the bottom of the workbook). The cells can be adjusted, added, or removed as necessary.
Textbook: Titman, S., Keown, A. J., & Martin, J. D. (2014). Financial management: Principles and applications (12th ed.). Upper Saddle River, NJ: Pearson.
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UNFORMATTED ATTACHMENT PREVIEW
Problem 3-13 Warner Company Balance Sheet Current Assets Warner Company Income Statement Recall from reading checkpoint 3.1 to construct an income statement in this space, adjusting as needed. (You may delete these instructions.) Long Term (fixed) assets Current Liabilities Long-term Liabilities Owners Equity Total liabilities and equity Q. What can you say about the firm’s financial condition based on these financial statements? Q. Using the CSU Online Library find one article that discusses financial statements, cash flow, or ratio analysis. Briefly summarize the key points of the article as it relates to this unit. You may use any of the databases, but Business Source Complete is a good starting place. ome Statement cial r ratio analysis. Briefly es, but Business Source Problem 3-15 Answer the following four questions using the information found in the statements. a. Does BigBox generate positive cash flow from its operations? b. How much did BigBox invest in new capital expenditures over the last four years? c. Describe BigBox’s sources of financing in the financial markets over the last four years. d. Based solely on the cash flow statement for 2010 through 2013, write a brief narrative that describes the major activities of BigBox’s management team over the last four years. Problem 4-25 Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Instructions to use the Solution Template Enter the given values from the textbook on page 116 in the yellow colored cells below. In Cell E52, Calculate Current ratio using formula “Current Assets / Current Liabilities” In Cell E53, Calculate Times interest earned using formula “Net Operating Income/ Interest In Cell E54, Calculate Inventory Turnover using formula “Cost of goods sold/ Inventory” In Cell E55, Calculate Total Asset turn Over using formula “Net Sales / Total Assets” In Cell E56, Calculate Operating Profit Margin using formula “Net Operating Income / Net S In Cell E57, Calculate Operating Return on Assets using formula “Net Operating Income / To In Cell E58, Calculate Debt Ratio using formula “( Current Liabilities + Long-term debt) / Tot In Cell E59, Calculate Average Collection Period using formula “( Accounts Receivable * 365 In Cell E60, Calculate Fixed Asset Turnover using formula “Net Sales / Net Fixed Assets ” In Cell E61, Calculate Return on Equity using formula “Net Income / Owner’s Equity” Given J. P. Robard Mfg., Inc. Balance Sheet ($000) Cash Accounts receivable Inventories Current assets Net fixed assets Total assets Accounts payable Accrued expenses Short-term notes payable Current liabilities Long-term debt Owners’ equity Total liabilities and owners’ equity J. P. Robard Mfg., Inc. Income Statement ($000) Net sales (all credit) Cost of goods sold Gross profit Operating expenses (includes $500 depreciation) Net operating income Interest expense Earnings before taxes Income taxes (40%) Net income Solution Current ratio Times interest earned Inventory turnover Total asset turnover Operating profit margin Operating return on assets Debt ratio Average collection period Fixed asset turnover Return on equity Problem 4-25 ctions to use the Solution Template ge 116 in the yellow colored cells below. a “Current Assets / Current Liabilities” g formula “Net Operating Income/ Interest Expense” ormula “Cost of goods sold/ Inventory” g formula “Net Sales / Total Assets” ing formula “Net Operating Income / Net Sales” s using formula “Net Operating Income / Total Assets” ( Current Liabilities + Long-term debt) / Total Assets” using formula “( Accounts Receivable * 365 ) / Credit Sales ” formula “Net Sales / Net Fixed Assets ” mula “Net Income / Owner’s Equity” Given Solution b. e. If you were asked to what could you tell your boss about answers 3-13. (Review of financial statements) Prepare a balance sheet and income statement for the Warner Company from the following scrambled list of items: Depreciation expense Cash Long-term debt Sales Accounts payable General and administrative expense Buildings and equipment Notes payable Accounts receivable $ 66,000 225,000 334,000 573,000 102,000 79,000 895,000 Interest expense Accrued expenses Common stock Cost of goods sold Inventory Taxes Accumulated depreciation Taxes payable Retained earnings 75,000 167,500 4,750 7,900 289,000 297,000 99,300 50,500 263,000 53,000 262,900 CHAPTER 3 Understanding Financial Statements, Taxes, and Cash Flows 73 a. Prepare an income statement for the Warner Company. b. Prepare a balance sheet for the Warner Company. c. What can you say about the firm’s financial condition based on these financial statements? years. 3–15. (Analyzing the cash flow statement) The cash flow statements for retailing giant BigBox, Inc. spanning the period 2010-2013 are as follows: 12 Months Ending In Millions of U.S. Dollars 12/31/2013 12/31/2012 12/31/2011 12/31/2010 Net income $ 13,000 $ 12,000 $ 11,000 $ 10,000 Depreciation expense 6,500 6,300 5,000 4,000 Changes in working capital 1,200 2,300 2,400 1,000 Cash from operating activities $ 20,700 $ 20,600 $ 18,400 $ 15,000 Capital expenditures $ (16,000) $ (14,500) $ (14,000) Cash from investing activities $ (16,000) $ (14,500) $ (14,000 $(12,300) $ (12,300) Interest and financing cash flow items $ (350) $ (250) Total cash dividends paid (3,600) (2,800) Issuance (retirement) of stock (8,000) (1,500) Issuance (retirement) of debt 1,500 (100) Cash from financing activities $ (10,450) $ (4,650) Net change in cash $ (5,750) $ 1,450 $ (350) $ 100 (2,500) (2,200) (3,600) (4,500) 4.000 4,100 $ (2,450) $ (2,500) $ 1,950 $ 200 Management Answer the following questions using the information found in these statements: a. Does BigBox generate positive cash flow from its operations? b. How much did BigBox invest in new capital expenditures over the last four years c. Describe BigBox’s sources of financing in the financial markets over the last four years d. Based solely on the cash flow statement for 2010 through 2013, write a brief nar- rative that describes the major activities of BigBox’s management team over the last four years.
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Tags: “Income Statement” “balance sheet”