Wrough 30.
SMOLIRA GOLF CORP.
2011 and 2012 Balance Sheets
Assets
2011
Liabilities and Owners' Equity
2012
2011
2012
Current assets
Cash
$24,046
$ 24,255
Current liabilities
Accounts payable
$ 23,184
$ 27,420
Accounts
receivable
Inventory
Total
12,000
12,448
25,392
$61,886
15,235
27,155
$ 66,645
11,571
10,800
15,553
$ 53,773
$ 46,755
$ 80,000
$ 95,000
Notes payable
Other
Total
Long-term debt
Owners' equity
Common stock and
paid-in surplus
Accumulated
retained earnings
$ 40,000 $ 40,000
Fixed assets
219,826
243,606
Net plant and
equipment
324,695
365,734
$259,826
$283,606
Total
Total liabilities and
owners' equity
Total assets
$386,581
$432,379
$386,581
$432,379
SMOLIRA GOLF CORP.
2012 Income Statement
Sales
Cost of goods sold
Depreciation
Earnings before interest and taxes
Interest paid
Taxable income
Taxes (35%)
Net income
Dividends
Retained earnings
$366,996
253,122
32,220
$ 81,654
14,300
$ 67,354
23,574
$ 43,780
$20,000
23,780
26. Calculating Financial Ratios [LO2] Find the following financial ratios for Smolira
Golf Corp. (use year-end figures rather than average values where appropriate):
Short-term solvency ratios:
a. Current ratio
b. Quick ratio
c. Cash ratio
Asset utilization ratios:
d. Total asset turnover
e. Inventory turnover
f. Receivables turnover
Financial Statements and Long-Term Financial Planning
PART 2
Long-term solvency ratios:
g. Total debt ratio
h. Debt-equity ratio
i. Equity multiplier
j. Times interest earned ratio
k. Cash coverage ratio
Profitability ratios:
1. Profit margin
m. Return on assets
n. Return on equity
27. DuPont Identi
ile using ROA X b for
24
.
both beginning of period and end of period total assets. What do you observe?
Calculating EFN [LO2] The most recent financial statements for Fleury, Inc.,
follow. Sales for 2012 are projected to grow by 20 percent. Interest expense will
remain constant; the tax rate and the dividend payout rate will also remain constant.
Costs, other expenses, current assets, fixed assets, and accounts payable increase
spontaneously with sales. If the firm is operating at full capacity and no new debt or
equity is issued, what external financing is needed to support the 20 percent growth
rate in sales?
FLEURY, INC.
2011 Income Statement
Sales
Costs
Other expenses
Earnings before interest and taxes
Interest paid
Taxable income
Taxes
Net income
Dividends
Addition to retained earnings
$743,000
578,000
15,200
$149,800
11,200
$138,600
48,510
$ 90,090
$27,027
63,063
FLEURY, INC.
Balance Sheet as of December 31, 2011
Assets
Liabilities and Owners' Equity
Current assets
Current liabilities
Cash
$ 20,240 Accounts payable
$ 54,400
Accounts receivable
32,560 Notes payable
13,600
Inventory
69,520 Total
$ 68,000
Total
$122,320 Long-term debt
$126,000
Owners' equity
Net plant and equipment $330,400 Common stock and paid-in surplus $112,000
Retained earnings
146,720
Total
$258,720
$452,720 Total liabilities and owners' equity $452,720
Fixed assets
Total assets
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