- a. Profit Margin: (Net Income/Sales)
b. Current Ratio: (Current Assets/Current Liabilities)
c. Total Asset Turnover: (Sales/Total Assets)
d. Capital Structure Leverage: (Assets/CSE)
e. Total Liabilities to Total Asset Ratio: (Total Liabilities/ Total Assets)
a. 297,830/2,499,000 = .12
b. 1,630,300/545,700 = 2.99
c. 2,499,000/2,531,300 = .99
d. 2,531,300/1,135,600 = 2.23
e. 1,395,700/2,531,300 = .55
- Still using the financial statements from Sanibel Corporation for 2011, if the dividend paid in 2011 was for $100,000, what must the ending retained earnings for 2010 have been?
Beg RE + NI - Dividend = RE end
X + 297,830 - 100,000 = 421,600
Beg RE = 223,770
Pg. 129
- On a common size basis, which of the following assets is normally largest for an electric utility?
Property, Plant and Equipment
Pg. 43
- Which of the following is not an activity reported in the Statement of Cash Flows?
Manufacturing
Pg. 186
- Which of the following activities is an operating activity?
Collections of accounts receivable
Pg. 186
- The current risk-free rate of the return in the economy is 6%. In addition, the market rate of return is currently 8.5%.
Given this information, what would be the expected return on common stock for a company with a systematic risk level (Beta) of 1.3?
CAPM = rf + Beta(rm - rf)
6 + 1.3*(8.5 - 6) = 9.25
- Analyze news stories using dividend discount model
P = D1 / (r-g)
- Compute the amount of dividends you can estimate that Simmons will pay at the end of Year +1 in order to balance your projected balance sheet. Present the projected balance sheet here:
A 200
____________________________________
L 43
80 123+20 = 143 200-143 = 57 (RE end)
+
E 20
_______________________________
L+E 200
BegRE + NI - D = RE end
34 + 40 - X = 57
Dividends = 17
Pg. 814, 765
- All of the following are primary events that typically lead to changes in book value of shareholders' equity except:
Debtholders requiring firms to enter into debt covenants
Pg. 512
- Cash Payments for purchase of treasury stock
financing cash flows
Pg. 519
