Exam 19: Projecting Cash Flow and Earnings

Green Recycling, Inc., has 150,000 shares of stock outstanding. The firm has total assets of $568,000 and total liabilities of $415,000. The firm's stock is selling for $31 a share. What is the price-book ratio?

Young Industries has a 3-year bank loan of $95,000, a 6-month note payable of $7,500, an $89,700 mortgage, and accounts payable of $43,900. What is the amount of the total current liabilities? (Ignore the current portion of any long-term debt.)

Which of the following are current assets?I. inventory II. goodwill III. fixed assets IV. cash

Which one of the following is most apt to vary directly with sales?

Children's Books, Inc., has net income of $50,000 and a plowback ratio of 80%. There are 22,000 shares of stock outstanding at a market price of $18.64 a share. What is the price-earnings ratio?

What is the investment cash flow, given the following information? Net income \6 00 Depreciation \7 0 Issuance of new stock \3 0 Repayment of long-term debt \2 0 Sale of old equipment \4 0 Purchase of new equipment \6 0 Dividend payments \7 0 Interest payments \1 00

Which of the following are classified as equity accounts on a balance sheet?I. goodwill II. paid in capital III. net income IV. retained earnings

A decrease in which one of the following will increase the gross margin?

Which one of the following is most apt to be constant given the percentage of sales approach to creating pro forma statements?

Regulation FD requires companies to do which one of the following when disclosing material nonpublic information?

Which one of the following is used to pay dividends or kept as retained earnings by a firm?

Bay Marina, Inc., has net income of $153,700 and has 50,000 shares of stock outstanding. Similar firms have a price-earnings ratio of 15. Given this, what should the market price of Bay Marina, Inc., stock be per share?

A firm has net sales of $43,000, operating expenses of $8,200, depreciation of $2,500, and cost of goods sold of $21,400. What is the gross margin?

How frequently do corporations file 10K reports with the SEC?

A firm has net income of $439,000 on sales of $690,000. Sales are expected to increase by 4% next year and the dividend payout ratio is 40%. The firm uses the percentage of sales approach when compiling pro forma statements. What amount is expected to be added to retained earnings next year?

The Corner Market had annual sales of $700,000 and total assets of $605,000. What is the return on assets if the profit margin is 8%?

A firm has $4,200 of cash, equipment worth $46,300, inventory of $38,400, a building worth $130,500, and $21,500 of accounts receivable. What is the value of the total fixed assets?

Which one of the following is equal to net income expressed as a percentage of total assets?

A firm has the following account balances for this year. Sales for the year are $500,000. Projected sales for next year are $545,000. The percentage of sales approach is used for pro forma purposes. All balance sheet accounts, except long-term debt and common stock, change according to that approach. The firm plans to decrease the long-term debt balance by $5,000 next year. Retained earnings is expected to increase by $3,500 next year. What is the projected external financing need? Current assets \4 8,000 Net fixed assets \1 58,000 Current liabilities \4 8,000 Long-term debt \8 3,000 common stock \3 6,000 Retained earnings \4 0,000

Last year, a firm had net income of $508,000 on sales of $1,250,000. The projected sales for next year are $1,450,000. Assume the firm uses the percentage of sales method for pro forma statements. What is the projected net income?