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Principles of Finance 2e

Problems

Principles of Finance 2eProblems

Problems

1 .
Sarah’s Toy Shop has total sales of $100,000, net credit sales of $70,000, beginning accounts receivable of $20,000, and ending accounts receivable of $30,000. What is Sarah’s accounts receivable turnover? Assume industry average is 2.9 times. How would you interpret Sarah’s turnover?
2 .
Fantastic Foods has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is Fantastic Foods’ current ratio?
3 .
The Big Club has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short-term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is The Big Club’s quick ratio?
4 .
Giant Sales has total assets of $150,000, current assets of $80,000 (current assets includes $30,000 of cash, $10,000 of short-term investments, $20,000 of accounts receivable, and $20,000 of inventory), total liabilities of $120,000, and current liabilities of $70,000. What is Giant Sales’ cash ratio?
5 .
Bonita’s Bread Company has total debt of $250,000 and total assets of $150,000. What is Bonita’s debt-to-assets ratio, and what can we infer about Bonita’s company using the ratio?
6 .
Jai Company has total liabilities of $200,000 and total stockholder equity of $300,000. What is the debt-to-equity ratio for Jai Company, and what can we infer about the firm using this ratio?
7 .
Jamilah’s Manufacturing Company has earnings before interest and taxes of $29,000 and interest expense of $4,000 for the most current period. What is Jamilah’s times interest earned ratio?
8 .
Sarai’s Sandy Beach Gear has net sales of $100,000, cost of goods sold of $60,000, and net income of $25,000. What is Sarai’s profit margin?
9 .
Bob’s Tires Inc. has sales of $100,000, net income of $50,000, beginning asset balance of $200,000, ending asset balance of $220,000, beginning stockholder equity of $160,000, and ending stockholder equity of $200,000. What is Bob’s return on total assets?
10 .
Bob’s Tires Inc. has sales of $100,000, net income of $50,000, beginning asset balance of $200,000, ending asset balance of $220,000, beginning stockholder equity of $160,000, and ending stockholder equity of $200,000. What is Bob’s return on equity?
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