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    Assignment 3

    Uploaded by

    Lili Gulo
    This document contains instructions for a group assignment involving the analysis of 10 practice problems related to financial ratios and accounting. Students are asked to answer the questions in groups using a word document and PowerPoint presentation. They must choose a team leader who will be responsible for submitting the assignment via email by the deadline and presenting the group's findings in class. The maximum time allotted for each group's presentation and Q&A is 30 minutes. Good luck is wished to the students in successfully completing this assignment.

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    Assignment 3

    Uploaded by

    Lili Gulo
    69 views2 pages
    This document contains instructions for a group assignment involving the analysis of 10 practice problems related to financial ratios and accounting. Students are asked to answer the questions in groups using a word document and PowerPoint presentation. They must choose a team leader who will be responsible for submitting the assignment via email by the deadline and presenting the group's findings in class. The maximum time allotted for each group's presentation and Q&A is 30 minutes. Good luck is wished to the students in successfully completing this assignment.

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    assignment 3

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    This document contains instructions for a group assignment involving the analysis of 10 practice problems related to financial ratios and accounting. Students are asked to answer the questions in groups using a word document and PowerPoint presentation. They must choose a team leader who will be responsible for submitting the assignment via email by the deadline and presenting the group's findings in class. The maximum time allotted for each group's presentation and Q&A is 30 minutes. Good luck is wished to the students in successfully completing this assignment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    69 views2 pages

    Assignment 3

    Uploaded by

    Lili Gulo
    This document contains instructions for a group assignment involving the analysis of 10 practice problems related to financial ratios and accounting. Students are asked to answer the questions in groups using a word document and PowerPoint presentation. They must choose a team leader who will be responsible for submitting the assignment via email by the deadline and presenting the group's findings in class. The maximum time allotted for each group's presentation and Q&A is 30 minutes. Good luck is wished to the students in successfully completing this assignment.

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    ASSIGNMENT 3

    1. Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the
    level of its accounts receivable? Assume there are 365 days in a year.

    2. Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some
    combination of long-term debt and common equity. What is the company’s debt ratio?

    3. Winston Washers’s stock price is $75 per share. Winston has $10 billion in total assets. Its
    balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in
    common equity. It has 800 million shares of common stock outstanding. What is Winston’s
    market/book ratio?

    4. A company has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of
    8.0. What is its P/E ratio?

    5. Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are
    $100 million and it has total assets of $50 million. What is its ROE? Donaldson & Son has an
    ROA of 10%, a 2% profit margin, and a return on equity equal to 15%. What is the company’s
    total assets turnover? What is the firm’s equity multiplier?

    6. Ace Industries has current assets equal to $3 million. The company’s current ratio is 1.5, and its
    quick ratio is 1.0. What is the firm’s level of current liabilities? What is the firm’s level of
    inventories?

    7. Assume you are given the following relationships for the Clayton Corporation:
    Sales/total assets 1.5
    Return on assets (ROA) 3%
    Return on equity (ROE) 5%
    Calculate Clayton’s profit margin and debt ratio.

    8. The Nelson Company has $1,312,500 in current assets and $525,000 in current liabilities. Its
    initial inventory level is $375,000, and it will raise funds as additional notes payable and use
    them to increase inventory. How much can Nelson’s short-term debt (notes payable) increase
    without pushing its current ratio below 2.0? What will be the firm’s quick ratio after Nelson has
    raised the maximum amount of short-term funds?

    9. The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, an inventory turnover of 6
    times, total current assets of $810,000, and cash and marketable securities of $120,000. What
    were Kretovich’s annual sales and its DSO? Assume a 365-day year.
    10. The Jimenez Corporation’s forecasted 2011 financial statements follow, along with some industry
    average ratios.
    a. Calculate Jimenez’s 2011 forecasted ratios, compare them with the industry average data, and
    comment briefly on Jimenez’s projected strengths and weaknesses.
    b. What do you think would happen to Jimenez’s ratios if the company initiated cost-cutting
    measures that allowed it to hold lower levels of inventory and substantially decreased the cost of
    goods sold? No calculations are necessary: Think about which ratios would be affected by
    changes in these two accounts.

    Instructions:
    a. Answer this question in groups with word & ppt format.
    b. Choose your own team leader who’s responsible to the assignments submission and the
    excellence of the content of the assignments and the presentation (slides and the ability of
    presenting the assignments) in class.
    c. Submit this assignment via email by only the team leader group to: [email protected]
    d. Subject email: ex: Group 1 Assignment 1; Group 2 Assignment 1; etc.
    e. Submit deadline: Day minus 1 (one) before the class begin at 11.59 p.m.
    f. Each groups have to make hard copy. Don’t forget bring your flash disk for your presentation in
    ppt.
    g. The maximum time of presentation and Q&A for each group: 30 minutes.

    Thank you and good luck!

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