Which of the following would most likely signal that a company may be using aggressiveaccrual accounting policies to shift current expenses to later periods? Over the last fi veyear period, the ratio of cash fl ow to net income has:A . increased each year.B . decreased each year.C . fl uctuated from year to year.
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Which of the following would most likely signal that a company may be using aggressive
accrual accounting policies to shift current expenses to later periods? Over the last fi veyear period, the ratio of cash fl ow to net income has:
A . increased each year.
B . decreased each year.
C . fl uctuated from year to year.
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- If a company’s current ratio declined in a year during whichits quick ratio improved, which of the following is the mostlikely explanation?a. Inventory is increasing.b. Inventory is declining.c. Receivables are being collected more rapidly than inthe past.d. Receivables are being collected more slowly than inthe past.What is the amount of working capital and the current ratio at the end of this year? What is the acid - test ratio at the end of this year? What is the accounts receivable turnover and the average collection period? What is the inventory turnover and the average sale period? What is the company's operating cycle? What is the total asset turnover? What is the times interest earned ratio? What is the debt-to-equity ratio at the end of this year? Markus Company's common stock sold for $2.75 per share at the end of this year. The company paid a common stock dividend of $0.55 per share this year. It also provided the following data excerpts from this year's financial statements: Ending Balance Beginning Balance Cash Accounts receivable Inventory Current assets Total assets Current liabilities Total liabilities Common stock, $1 par value Total stockholders' equity Total liabilities and stockholders' equity Sales (all on account) Cost of goods sold Gross margin Net operating income Interest…Suppose the company has to revise its estimates because of a downturn in the economy. Unit sales for August, September, and October will be half (50%) of the original estimates. Revise the estimates in cells 1311 through 1313. After this is done, check your forecasted balance sheet. It should still balance! What effect will this new state of affairs have on net income and borrowing? Explain why these items changed.
- How should the company respond to the ongoing situation to mitigate risk of failing the working capital given the following financial ratio? 1. Liquidity ratio : current ratio: 2.61xquick ratio: 2.56cash ratio: 0.85 2. Accounts receivable turnover: 4.08Ave collection period: 89.46 days 3. Inventory turnover: 38.76ave age of inventory: 9.42 4. Average payable turnover: 1.04ave payment period: 350.96 Note: Their working capital is 22,887,683 Current asset (37,127,683) - current liabilities (14,260,065) = 22,887,683Over the past year, M.D. Ryngaert & Co. had an increase in its current ratio and a declinein its total assets turnover ratio. However, the company’s sales, cash and equivalents, DSO,and fixed assets turnover ratio remained constant. What balance sheet accounts must havechanged to produce the indicated changes?Data on Shick Inc. for last year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365 day year. Do not round yourData on Shick Inc. for last year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year. Do not round your intermediate calculations. Sales $103, 000 Accounts receivable $16,000 Days Sales Outstanding (DSO) 56.699 Benchmarks' Days Sales Outstanding (DSO) 19.000 a. $9,805 b. $11,471 c. $10, 638 d. $4,529
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- Required: 1. Compute the company's average operating assets for last year. 2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.) 3. What was the company’s residual income last year?24. Following are a company's income statement at the end of the last year (year 0) and coming year (year 1). Each year, the company's accounts receivable need to be main- tained at 5% of sales. The company's inventory and accounts payable do not change. Capital expenditure in year 1 is $10,000. Year Sales Depreciation EBIT Taxes (a) What is the free cash flow in year 17 1 85,000 92,000 20,000 22,000 17,000 19,500 3,500 3,700 0 (b) The company's business is mature, so it is expected to generate the same amount of free cash flow every year forever. The firm-specific discount rate is 7%, and the risk-free rate is 2%. What is the enterprise value of the company? (c) The company has $150,000 in cash and $50,000 in debt. In addition, it has 7000 shares outstanding. What is the company's stock price per share?Which ratio measures the number of times the receivables are rotated in a year in terms of sales? [A] stock turnover ratio [B] debtors turnover ratio [C] creditors velocity ratio [D] working capital turnover ratio
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