Exhibit 19-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) You are provided with the following information about Albermarle Corp. $\begin{array}{lr} \text { Income Statement Data } &\\ \text { Sales } &542 \\ \text { Operating Income } &38 \\ \text { Depreciation } &3 \\ \text { Interest Expense } &3 \\ \text {Pretax Income } &32 \\ \text {Income Taxes } &13 \\ \text { Net Income after tax } &19\\ \\ \text { Balance Sheet Data } &\\ \text { Fixed Assets } &41\\ \text { Total Assets } &245\\ \text {Working Capital } &123\\ \text { Total Debt } &16\\ \text { Equity } &159\\ \end{array}$ -Refer to Exhibit 19-5. Calculate the income tax rate.

A) 40.6% B) 25.6% C) 16.8% D) 28.9% E) 44.9% A) 40.6% B) 25.6% C) 16.8% D) 28.9% E) 44.9%

Exhibit 19-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c} \text { STAR CORPORATION INCOME STATEMENT} \\ \text {FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS') } \\ \begin{array}{lr} \text { Net Sales } &\quad\quad\quad\quad\quad\quad\quad \$ 1075 \\ \text { Cost of Goods Sold } & \underline {706 }\\ \text { Gross Profit Margin } & 369 \\ \text { Depreciation } & 30 \\ \text { Operating Expense } & 109 \\ \text { Administrative Expense } & \underline {129} \\ \text { Operating Profit } &101\\ \text { Interest }\\ \text {Profit Before Taxes}&\frac{29}{72} \\ \text { Taxes } \\ \text {Net Income }&\$\frac{21}{51} \\ \end{array}\end{array}$ $\begin{array}{c} \text { STAR CORPORATION BALANCE SHEET } \\ \text { FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS) } \\ \begin{array}{lll} \text { ASSETS }\\ \hline\text { Cash } & \$ 69 \\ \text { Accounts receivables } & 233 \\ \text { Inventory } & \underline { 348} \\ \text { Total current assets } &650 \\ \text { Net fixed assets } & \underline { 886} \\ \\ \\ \\ \\ \text { Total assets }& \$ 1536\\ \end{array} \begin{array}{lll} \text { LIABILITIES }\\ \hline\text { Notes payable } & \$ 231 \\ \text { Accounts payable } & 146 \\ \text { Accruals } & \underline { 31} \\ \text { Total current liabilities } & 408 \\ \text { Long term debt } & 318\\ \text { Common stock ( } \$ 1.50 \text { par) } & 111\\ \text { Paid in surplus } & 190 \\ \text { Retained earnings } & \underline { 509} \\ \text { Total liabilities and } & \\ \quad \text { Stockholders' equity } & \$ 1536 \end{array} \end{array}$ -Refer to Exhibit 19-2. What was Star's interest coverage for 2009?

A) 4.99 B) 2.58 C) 3.48 D) 5.16 E) 6.02 A) 4.99 B) 2.58 C) 3.48 D) 5.16 E) 6.02

Exhibit 19-1 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c} \text { BMC CORPORATION INCOME STATEMENT } \\ \text {FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS') } \\ \begin{array}{lr} \text { Net Sales } &\quad\quad\quad\quad\quad\quad\quad \$ 1025 \\ \text { Cost of Goods Sold } & \underline {682 }\\ \text { Gross Profit Margin } & 343 \\ \text { Depreciation } & 31 \\ \text { Operating Expense } & 103 \\ \text { Administrative Expense } & \underline {127} \\ \text { Operating Profit } & 82\\ \text { Interest }\\ \text {Profit Before Taxes}&\frac{27}{55} \\ \text { Taxes } \\ \text {Net Income }&\$\frac{17}{38} \\ \end{array}\end{array}$ $\begin{array}{c} \text { BMC CORPORATION BALANCE SHEET } \\ \text { FISCAL YEAR ENDING 12/31/2009 } \\ \text { (DOLLARS IN THOUSANDS) } \\ \begin{array}{lll} \text { ASSETS }\\ \hline\text { Cash } & \$ 61 \\ \text { Accounts receivables } & 286 \\ \text { Inventory } & \underline { 354} \\ \text { Total current assets } & 701 \\ \text { Net fixed assets } & \underline { 802} \\ \\ \\ \\ \\ \text { Total assets }& \$ 1503\\ \end{array} \begin{array}{lll} \text { LIABILITIES }\\ \hline\text { Notes payable } & \$ 223 \\ \text { Accounts payable } & 152 \\ \text { Accruals } & \underline { 32} \\ \text { Total current liabilities } & 407 \\ \text { Long term debt } & 306 \\ \text { Common stock ( } \$ 1.50 \text { par) } & 102 \\ \text { Paid in surplus } & 226 \\ \text { Retained earnings } & \underline { 462} \\ \text { Total liabilities and } & \\ \quad \text { Stockholders' equity } & \$ 1503 \end{array} \end{array}$ -Refer to Exhibit 19-1. What was BMC's return on equity in 2009?

A) 4.8% B) 5.9% C) 6.7% D) 8.3% E) 11.6% A) 4.8% B) 5.9% C) 6.7% D) 8.3% E) 11.6%

Exam 19: Analysis of Financial Statements

Exhibit 19-5 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) You are provided with the following information about Albermarle Corp. Income Statement Data Sales 542 Operating Income 38 Depreciation 3 Interest Expense 3 Pretax Income 32 Income Taxes 13 Net Income after tax 19 Balance Sheet Data Fixed Assets 41 Total Assets 245 Working Capital 123 Total Debt 16 Equity 159 -Refer to Exhibit 19-5. Calculate the income tax rate.

(Multiple Choice)

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(81)

Question 81

Exhibit 19-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) STAR CORPORATION INCOME STATEMENT FISCAL YEAR ENDING 12/31/2009 (DOLLARS IN THOUSANDS') Net Sales \ 1075 Cost of Goods Sold Gross Profit Margin 369 Depreciation 30 Operating Expense 109 Administrative Expense Operating Profit 101 Interest Profit Before Taxes Taxes Net Income frac 21 51 STAR CORPORATION BALANCE SHEET FISCAL YEAR ENDING 12/31/2009 (DOLLARS IN THOUSANDS) ASSETS Cash \ 69 Accounts receivables 233 Inventory Total current assets 650 Net fixed assets Total assets \ 1536 LIABILITIES Notes payable \ 231 Accounts payable 146 Accruals Total current liabilities 408 Long term debt 318 Common stock ( \ 1.50 par) 111 Paid in surplus 190 Retained earnings Total liabilities and Stockholders' equity \ 1536 -Refer to Exhibit 19-2. What was Star's interest coverage for 2009?

(Multiple Choice)

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(78)

Question 82

The growth of business depends on the percentage of earnings reinvested and the return on equity.

(True/False)

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Question 83

Exhibit 19-1 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) BMC CORPORATION INCOME STATEMENT FISCAL YEAR ENDING 12/31/2009 (DOLLARS IN THOUSANDS') Net Sales \ 1025 Cost of Goods Sold Gross Profit Margin 343 Depreciation 31 Operating Expense 103 Administrative Expense Operating Profit 82 Interest Profit Before Taxes Taxes Net Income frac 17 38 BMC CORPORATION BALANCE SHEET FISCAL YEAR ENDING 12/31/2009 (DOLLARS IN THOUSANDS) ASSETS Cash \ 61 Accounts receivables 286 Inventory Total current assets 701 Net fixed assets Total assets \ 1503 LIABILITIES Notes payable \ 223 Accounts payable 152 Accruals Total current liabilities 407 Long term debt 306 Common stock ( \ 1.50 par) 102 Paid in surplus 226 Retained earnings Total liabilities and Stockholders' equity \ 1503 -Refer to Exhibit 19-1. What was BMC's return on equity in 2009?

(Multiple Choice)

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Question 84

The growth of business depends on the percentage of earnings reinvested and the return on equity.

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An Introduction to Portfolio Management

Asset Pricing Models: Capm and Apt

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