please answer only last three parts

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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please answer only last three parts

 You are the new CFO of Risk Surfing Ltd, which has current assets of $7,920, net fixed assets of $17,700, current liabilities of $4,580 and long-term debts of $5,890

 

Required:

 

  1. What are the three important questions of corporate finance you will need to address? Please briefly explain them and indicate how they are related to the areas in the balance sheet of a company.
  2. Calculate owners’ equity and build a balance sheet for the company?
  3. How much is net working capital of the company?
  4. Calculate the return on assets of the company given that Return on Equity is 30%?
  5. What is the PE of the company total number of ordinary share outstanding of the companies is 2,000 and market price of each share is $12?
Expert Solution
Step 1

Formulas:

1) Calculation of net working capital = Current assets - Current liabilities.

2) Return on assets = Operating income/net assets.

3) PE = Current stock price/Earnings per share

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