FIN 341 Principles of Finance Online Winter 2014
Assignment: Ch. 3 Working with Financial Statements

SDJ, Inc., has net working capital of $3,640, current liabilities of $5,430, and inventory of $4,290.
 
What is the current ratio? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  Current ratio   times 

 
What is the quick ratio? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  Quick ratio   times 

2.Diamond Eyes, Inc., has sales of $20 million, total assets of $18.2 million, and total debt of $9.1 million. Assume the profit margin is 9 percent.
 
What is net income? (Enter your answer in dollars not in millions, i.e. 1,234,567.)
 
  Net income $   

 
What is ROA? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  ROA   % 

 
What is ROE? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  ROE   % 

 
3. Boom Lay Corp. has a current accounts receivable balance of $347,850. Credit sales for the year just ended were $4,313,340.
 
What is the receivables turnover? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  Receivables turnover   times 

 
What is the days’ sales in receivables? (Use 365 days a year. Round your answer to 2 decimal places. (e.g., 32.16))
 
  Sales in receivables   days 

 
How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Round your answer to 2 decimal places. (e.g., 32.16))
 
  Average collection period   days 

4. The Cape Corporation has ending inventory of $482,850, and cost of goods sold for the year just ended was $4,548,447.
 
What is the inventory turnover? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  Inventory turnover   times 

 
What is the days’ sales in inventory? (Use 365 days a year. Round your answer to 2 decimal places. (e.g., 32.16))
 
  Days’ sales in inventory   days 

 
How long on average did a unit of inventory sit on the shelf before it was sold? (Use 365 days a year. Round your answer to 2 decimal places. (e.g., 32.16))
 
  Inventory days on shelf   days 

 
5. Perry, Inc., has a total debt ratio of 0.36. What is its debt–equity ratio? (Round your answer to 2 decimal places. (e.g., 32.16))

  Debt–equity ratio   

What is its equity multiplier? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  Equity multiplier   

6. That Wich Corp. had additions to retained earnings for the year just ended of $141,000. The firm paid out $189,000 in cash dividends, and it has ending total equity of $4.94 million. The company currently has 120,000 shares of common stock outstanding.
 
What are earnings per share? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
  
  Earnings $   per share 

 
What are dividends per share? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  Dividends $   per share 

 
What is the book value per share? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  Book value $   per share 

 
If the stock currently sells for $84 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
 
  Market-to-book ratio   times 

 
What is the price–earnings ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
 
  Price–earnings ratio   times 

 
If the company had sales of $4.44 million, what is the price–sales ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
 
  Price–sales ratio   times 

 
7. If Roten Rooters, Inc., has an equity multiplier of 1.60, total asset turnover of 2.20, and a profit margin of 4 percent, what is its ROE? (Round your answer to 2 decimal places. (e.g., 32.16))
 
  ROE   % 

8. You are given the following information for Shinoda Corp.:
  
 
  Decrease in inventory $ 500 
  Decrease in accounts payable   200 
  Increase in notes payable   185 
  Increase in accounts receivable   215 
________________________________________
 
Did cash go up or down? By how much?
 
  Cash increased  by  $ 

 
Classify each event as a source or use of cash.
 
    
  Decrease in inventory is a      
  Decrease in accounts payable is a      
  Increase in notes payable is a      
  Increase in accounts receivable is a     
________________________________________

 
9. Tortoise, Inc., had a cost of goods sold of $45,021. At the end of the year, the accounts payable balance was $8,583. How long on average did it take the company to pay off its suppliers during the year? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
 
  Average suppliers pay off   days 

 
10.
Just Dew It Corporation reports the following balance sheet information for 2011 and 2012.
 
JUST DEW IT CORPORATION
2011 and 2012 Balance Sheets
Assets  Liabilities and Owners’ Equity
 2011  2012   2011  2012
  Current assets                   Current liabilities             
      Cash $ 10,200     $ 13,200           Accounts payable $ 46,000     $ 62,160 
      Accounts receivable   30,200       38,640           Notes payable   27,800       33,120 
      Inventory   74,600       87,120                   
  ________________________________________ ________________________________________     ________________________________________ ________________________________________       ________________________________________ ________________________________________     ________________________________________ ________________________________________ 
        Total $ 115,000     $ 138,960             Total $ 73,800     $ 95,280 
  ________________________________________ ________________________________________     ________________________________________ ________________________________________       ________________________________________ ________________________________________     ________________________________________ ________________________________________ 
                    Long-term debt $ 40,000     $ 36,000 
                    Owners’ equity             
                        Common stock and paid-in surplus $ 60,000     $ 60,000 
                        Retained earnings   226,200       288,720 
                    ________________________________________ ________________________________________     ________________________________________ ________________________________________ 
  Net plant and equipment $ 285,000     $ 341,040       Total $ 286,200     $ 348,720 
  ________________________________________ ________________________________________     ________________________________________ ________________________________________       ________________________________________ ________________________________________     ________________________________________ ________________________________________ 
  Total assets $ 400,000     $ 480,000       Total liabilities and owners’ equity $ 400,000     $ 480,000 
  ________________________________________________________________________________ ________________________________________________________________________________     ________________________________________________________________________________ ________________________________________________________________________________       ________________________________________________________________________________ ________________________________________________________________________________     ________________________________________________________________________________ ________________________________________________________________________________ 
________________________________________
 
Based on the balance sheets given for Just Dew It:
   
a. Calculate the current ratio for each year. (Round your answers to 2 decimal places. (e.g., 32.16))
   
  2011 2012
  Current ratio   times
  times

________________________________________
  
b. Calculate the quick ratio for each year. (Round your answers to 2 decimal places. (e.g., 32.16))
   
  2011 2012
  Quick ratio  times
 times

________________________________________
 
c. Calculate the cash ratio for each year. (Round your answers to 2 decimal places. (e.g., 32.16))
   
 2011 2012
  Cash ratio  times
 times

________________________________________
 
d. Calculate the NWC to total assets ratio for each year. (Round your answers to 2 decimal places. (e.g., 32.16))
    
  2011 2012
  NWC ratio   %
  %

________________________________________
 
e. Calculate the debt–equity ratio and equity multiplier for each year. (Round your answers to 2 decimal places. (e.g., 32.16))
 
  2011 2012
  Debt-equity ratio   times 
  times 

  Equity multiplier         
        

________________________________________
   
f. Calculate the total debt ratio and long-term debt ratio for each year. (Round your answers to 2 decimal places. (e.g., 32.16))
 
  2011 2012
  Total debt ratio   times
  times

  Long-term debt ratio   times
  times

________________________________________