Problem 9-14 If a firm has the following sources of finance, Current liabilities $ 90,000 Long-term debt 300,000 Preferred stock 85,000 Common stock 180,000 earns a profit of $45,000 after taxes, and pays $9,000 in preferred stock dividends, what is the return on assets, the return on total equity, and the return on common equity? Round your answers to two decimal places. Return on assets: % Return on total equity: % Return on common equity: % Problem 9-15 A firm has no cash sales (all sales are on credit and are collected 28 days after the sale). If the receivables are $164,000, what is the level of sales? Assume there are 365 days in a year. Round your answer to the nearest dollar. $ eBook Problem 9-16 A firm’s balance sheets for the last two years are as follows: YEAR 20X1 Assets Liabilities and Equity Cash $ 5,000 Accounts payable $ 12,000 Accruals 7,000 Accounts receivable 16,000 Current bank note 12,000 Inventory 23,000 Long-term debt 9,000 Plant and equipment 36,000 Common stock 19,000 Retained earnings 21,000 $ 80,000 $ 80,000 YEAR 20X2 Assets Liabilities and Equity Cash $ 4,000 Accounts payable $ 12,000 Accruals 13,000 Accounts receivable 17,000 Current bank note 8,000 Inventory 23,000 Long-term debt 4,000 Plant and equipment 36,000 Common stock 20,000 Retained earnings 23,000 $ 80,000 $ 80,000 Sales in 20X1 were $205,000. Sales in 20X2 were $205,000. Based solely on the current ratio and the quick ratio, has the firm’s liquidity position deteriorated or improved? Round your answers to two decimal places. Current ratios: 20x1: 20x2: Quick ratios: 20x1: 20x2: The firm’s liquidity position has -Select-deterioratedimprovedremained the sameItem 5 . Without doing a calculation, has days sales outstanding (receivables turnover) improved? Days sale outstanding has -Select-deterioratedimprovedremained the sameItem 6 . Without doing a calculation, has inventory turnover deteriorated? Inventory turnover has -Select-deterioratedimprovedremained the sameItem 7 . If the firm earned $7,000 during 20X2, what proportion of those earnings were distributed? Round your answer to two decimal places. %

Problem 9-14 If a firm has the following sources of finance, Current liabilities $ 90,000 Long-term debt 300,000 Preferred stock 85,000 Common stock 180,000 earns a profit of $45,000 after taxes, and pays $9,000 in preferred stock dividends, what is the return on assets, the return on total equity, and the return on common equity? Round your answers to two decimal places. Return on assets: % Return on total equity: % Return on common equity: % Problem 9-15 A firm has no cash sales (all sales are on credit and are collected 28 days after the sale). If the receivables are $164,000, what is the level of sales? Assume there are 365 days in a year. Round your answer to the nearest dollar. $ eBook Problem 9-16 A firm’s balance sheets for the last two years are as follows: YEAR 20X1 Assets Liabilities and Equity Cash $ 5,000 Accounts payable $ 12,000 Accruals 7,000 Accounts receivable 16,000 Current bank note 12,000 Inventory 23,000 Long-term debt 9,000 Plant and equipment 36,000 Common stock 19,000 Retained earnings 21,000 $ 80,000 $ 80,000 YEAR 20X2 Assets Liabilities and Equity Cash $ 4,000 Accounts payable $ 12,000 Accruals 13,000 Accounts receivable 17,000 Current bank note 8,000 Inventory 23,000 Long-term debt 4,000 Plant and equipment 36,000 Common stock 20,000 Retained earnings 23,000 $ 80,000 $ 80,000 Sales in 20X1 were $205,000. Sales in 20X2 were $205,000. Based solely on the current ratio and the quick ratio, has the firm’s liquidity position deteriorated or improved? Round your answers to two decimal places. Current ratios: 20x1: 20x2: Quick ratios: 20x1: 20x2: The firm’s liquidity position has -Select-deterioratedimprovedremained the sameItem 5 . Without doing a calculation, has days sales outstanding (receivables turnover) improved? Days sale outstanding has -Select-deterioratedimprovedremained the sameItem 6 . Without doing a calculation, has inventory turnover deteriorated? Inventory turnover has -Select-deterioratedimprovedremained the sameItem 7 . If the firm earned $7,000 during 20X2, what proportion of those earnings were distributed? Round your answer to two decimal places. %

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

Problem 1PS

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Problem 9-14

If a firm has the following sources of finance,

Current liabilities	$	90,000
Long-term debt		300,000
Preferred stock		85,000
Common stock		180,000

earns a profit of $45,000 after taxes, and pays $9,000 in preferred stock dividends, what is the return on assets, the return on total equity, and the return on common equity? Round your answers to two decimal places.

Return on assets: %

Return on total equity: %

Return on common equity: %

Problem 9-15

A firm has no cash sales (all sales are on credit and are collected 28 days after the sale). If the receivables are $164,000, what is the level of sales? Assume there are 365 days in a year. Round your answer to the nearest dollar.

eBook

Problem 9-16

A firm’s balance sheets for the last two years are as follows:

YEAR 20X1
Assets		Liabilities and Equity
Cash	$	5,000	Accounts payable	$	12,000
			Accruals		7,000
Accounts receivable		16,000	Current bank note		12,000
Inventory		23,000	Long-term debt		9,000
Plant and equipment		36,000	Common stock		19,000
			Retained earnings		21,000
	$	80,000		$	80,000

YEAR 20X2
Assets		Liabilities and Equity
Cash	$	4,000	Accounts payable	$	12,000
			Accruals		13,000
Accounts receivable		17,000	Current bank note		8,000
Inventory		23,000	Long-term debt		4,000
Plant and equipment		36,000	Common stock		20,000
			Retained earnings		23,000
	$	80,000		$	80,000

Sales in 20X1 were $205,000. Sales in 20X2 were $205,000.

Based solely on the current ratio and the quick ratio, has the firm’s liquidity position deteriorated or improved? Round your answers to two decimal places.

Current ratios:

20x1:

20x2:

Quick ratios:

20x1:

20x2:

The firm’s liquidity position has -Select-deterioratedimprovedremained the sameItem 5 .

Without doing a calculation, has days sales outstanding (receivables turnover) improved?

Days sale outstanding has -Select-deterioratedimprovedremained the sameItem 6 .

Without doing a calculation, has inventory turnover deteriorated?

Inventory turnover has -Select-deterioratedimprovedremained the sameItem 7 .

If the firm earned $7,000 during 20X2, what proportion of those earnings were distributed? Round your answer to two decimal places.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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