Midterm Finance
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Nancy JaramilloMidterm1. San Dimas Energy Inc. has total assets of $800,000 and an equity multiplier of 1.25. What is the debt-equity ratio?Equity multiplier-1= debt-equity ratio 1.25-1=0.250.250.601.221.682. As an inventory manager in your company, you need to calculate how long on average it takes your company to sell its inventory. Here are the data you collected: sales of $1,200,600, cost of goods sold of $900,100, and inventory of $45,000. Inventory turnover = $900,100/ $45,000 = 20.00222; Days in inventory = 365 /20.00222= 18.24797=18.252.6618.2520.00137.133. La Verne Solar Inc. has sales of $500,000, cost of goods sold of $263,000, and accounts receivable of $60,000. How long on average does it take the firm’s customers to pay for their purchases? Accounts receivable turnover rate = $500,000/ $60,000= 8.33333 Days’ sales in receivables = 365 / 8.33333= 43.80001752 It takes customers an average of 43.80 days to pay for their purchases.4.668.168.3343.804. Bonita Pizza Inc. has sales of $200,800, net profit of $36,600, fixed assets of $130,300, and current assets of $55,400. What is the total asset turnover rate?Total asset turnover rate = $200,800 / ($130,300+ $55,400) = 1.081313947=1.081.083.168.7353.205. Glendora Realtor Co. is considering a project that will produce cash inflows of $36,000 year one, $54,800 in year two, and $72,900 in year three. What is the present value of these cash inflows if the company assigns the project a discount rate of 14 percent?36000/(1.14)1= 31578.9554,800/ (1.14)2=42166.8272,900/(1.14)3= 49205.42Add all = 122,951.1915 A. $106,713.06 B. $122,951.19 D. $131,333.33 D. $167,098.12 (#6 -10) You collected your company financial data as below. 2016 2017 Sales $3,813 $4,019 Long-term debt 1,555 899 Interest paid 121 143 Owner’s equity 3,200 3,700
Accounts receivable 498 402 Depreciation 306 393 Cash 413 911 Inventory 1,516 1,533 Accounts payable 387 460 Cost of goods sold 2,123 2,609 Net fixed assets 2,715 2,213 Other costs 391 514 Taxes paid 305 1266. Find the operating cash flow (OCF) for 2017. EBIT = $4019(Sales) – $2609(COGS) – $393(depreciation) = 1410-393 = $1017 Taxes paid = $126 Operating cash flow = $1017(EBIT) + $393 (depreciation) – $126 (Taxes paid) = $1284Answer- $1284 7. Find the change in net working capital (NWC change).= ($911 + $402 + $1533 – $460) – ($413 + $498 + $1516 – $387) = 2386 –2040 = $346Answer- $3468. Calculate cash flow from asset (means, the free cash flow of the company) *Hint: you need to calculate net capital spending in addition to using the previous question resultsNet Capital Spending= $2,213- $2,715 + $393 = -$109