question 1. Toodles Inc. had sales of $1,840,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $1,180,000, $185,000 and $365,000 respectively. In addition, the company had an interest expense of $280,000 and a tax rate of 35 percent. (Ignore any tax loss carry-back or carry-forward provisions.)Arrange the financial information for Toodles Inc. in an income statement and compute its OCF?Question 2 Anti-Pandemic Pharma Co. Ltd. reports the following information in its income statement: Sales = $5,250,000;Costs = $2, 173,000;Other expenses = $187,400; Depreciation expense = $79,000; Interest expense= $53,555; Taxes = $76,000; Dividends = $69,000. $136,700 worth of new shares were also issued during the year and long-term debt worth $65,300 was redeemed.a) Compute the cash flow from assetsb) Compute the net change in working capitalQuestion 3Footfall Manufacturing Ltd. reports the following financial information at the end of the current year: net sale $100 000 debtor's turnover ration (based on net sales) 2 inventory turnover ration 1.25 fixed assets turnover ratio 0.8 debt to assets ratio 0.6 net profit margin 5% gross profit margin 25% return on investment 2% Use the given information to fill out the templates for income statement and balance sheet given below: Income Statement of Footfall Manufacturing Ltd. for the year ending December 31, 20XX(in $) sales 100,000 cost of goods sold gross profit other expenses earnings before tax tax @50% earnings after tax Balance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX (in $) liabilities amount assets amount equity net fixed assets long term debt 50, 000 inventory short term debt debtors cash total total Question 4Waterfront Inc. wishes to borrow on a short-term basis without reducing its current ratio below 1.25. At present its current assets and current liabilities are $1,600 and $1,000 respectively. How much can Waterfront Inc. borrow?Question 5Jingle Ltd. and Bell Ltd. belong to the same industry. A snapshot of some of their financial information is given below: jingle ltd bell ltd current ratio 3.2 : 1 2 : 1 acid test ratio 1.7 : 1 1.1 : 1 debt equity ratio 30% 40% times interest earned 6 5 You are a loans officer and both companies have asked for an equal 2-year loan. i) If you could facilitate only one loan, which company would you refuse? Explain your reasoning brieflyii) If both companies could be facilitated, would you be willing to do so? Explain your argument briefly.Question 6During 2019, Bitsincoins Corporation had EBIT of $100,000, a change in net fixed assets of $400,000, an increase in net current assets of $100,000, an increase in spontaneous current liabilities of $400,000, a depreciation expense of $50,000, and a tax rate of 30%. Based on this information, what is Bitsincoin’s free cash flow?
question 1.
Toodles Inc. had sales of $1,840,000. Cost of goods sold,
administrative and selling expenses, and
$1,180,000, $185,000 and $365,000 respectively. In addition, the
company had an interest expense of $280,000 and a tax rate of 35
percent. (Ignore any tax loss carry-back or carry-forward provisions.)
Arrange the financial information for Toodles Inc. in an income
statement and compute its OCF?
Question 2
Anti-Pandemic Pharma Co. Ltd. reports the following information in
its income statement:
Sales = $5,250,000;
Costs = $2, 173,000;
Other expenses = $187,400;
Depreciation expense = $79,000;
Interest expense= $53,555;
Taxes = $76,000;
Dividends = $69,000.
$136,700 worth of new shares were also issued during the year and
long-term debt worth $65,300 was redeemed.
a) Compute the cash flow from assets
b) Compute the net change in working capital
Question 3
Footfall Manufacturing Ltd. reports the following financial
information at the end of the current year:
|
net sale |
$100 000 |
|
debtor's turnover ration (based on net sales) |
2 |
|
inventory turnover ration |
1.25 |
|
fixed assets turnover ratio |
0.8 |
|
debt to assets ratio |
0.6 |
|
net profit margin |
5% |
|
gross profit margin |
25% |
|
|
2% |
Use the given information to fill out the templates for income
statement and
Income Statement of Footfall Manufacturing Ltd. for the year ending
December 31, 20XX
(in $)
|
sales |
100,000 |
|
cost of goods sold |
|
|
gross profit |
|
|
other expenses |
|
|
earnings before tax |
|
|
tax @50% |
|
|
earnings after tax |
|
Balance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX
(in $)
|
liabilities |
amount |
assets |
amount |
|
equity |
|
net fixed assets |
|
|
long term debt |
50, 000 |
inventory |
|
|
short term debt |
|
debtors |
|
|
|
|
cash |
|
|
total |
|
total |
|
Question 4
Waterfront Inc. wishes to borrow on a short-term basis without
reducing its current ratio below 1.25. At present its current assets
and current liabilities are $1,600 and $1,000 respectively. How much
can Waterfront Inc. borrow?
Question 5
Jingle Ltd. and Bell Ltd. belong to the same industry. A snapshot of
some of their financial information is given below:
|
|
jingle ltd |
bell ltd |
|
current ratio |
3.2 : 1 |
2 : 1 |
|
acid test ratio |
1.7 : 1 |
1.1 : 1 |
|
debt equity ratio |
30% |
40% |
|
times interest earned |
6 |
5 |
You are a loans officer and both companies have asked for an equal
2-year loan.
i) If you could facilitate only one loan, which company would
you refuse? Explain your reasoning briefly
ii) If both companies could be facilitated, would you be willing
to do so? Explain your argument briefly.
Question 6
During 2019, Bitsincoins Corporation had EBIT of $100,000, a change
in net fixed assets of $400,000, an increase in net current assets of
$100,000, an increase in spontaneous current liabilities of $400,000,
a depreciation expense of $50,000, and a tax rate of 30%. Based on
this information, what is Bitsincoin’sfree cash flow ?
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