3 Questions Accounting (will tip)


Question Description

$2 per question. The first attached file is the questions and instructions, the second attached file is the sheet your work needs to be put in, and the third attached file is a supplemental document for a requirement in one of the questions where you summarize the main points. 

Use the provided Excel template to submit your responses to each of the study problems from the textbook below:
 3-13, p. 72. Review of financial statements
 3-15, p. 73. Analyzing the cash flow statement
 4-25, p. 116. Calculating financial ratios
Each question has a corresponding worksheet (look for the tab along the bottom of the workbook). The cells can be adjusted, added, or removed as necessary.

I will give a tip of $4 completed in the next 2-3 hours. 

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Problem 3-13 Warner Company Balance Sheet Current Assets Warner Company Income Statement Recall from reading checkpoint 3.1 to construct an income statement in this space, adjusting as needed. (You may delete these instructions.) Long Term (fixed) assets Current Liabilities Long-term Liabilities Owners Equity Total liabilities and equity Q. What can you say about the firm’s financial condition based on these financial statements? Q. Using the CSU Online Library find one article that discuses financial statements, cash flow, or ratio analysis. Briefly summarize the key points of the article as it relates to this unit. You may use any of the databases, but Business Source Complete is a good starting place. ome Statement cial ratio analysis. Briefly es, but Business Source Problem 3-15 Answer the following four questions using the information found in the statements. a. Does BigBox generate positive cash flow from its operations? b. How much did BigBox invest in new capital expenditures over the last four years? c. Describe BigBox’s sources of financing in the financial markets over the last four years. d. Based solely on the cash flow statement for 2010 through 2013, write a brief narrative that describes the major activities of BigBox’s management team over the last four years. Problem 4-25 Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Step 11 Instructions to use the Solution Template Enter the given values from the textbook on page 116 in the yellow colored cells below. In Cell E52, Calculate Current ratio using formula "Current Assets / Current Liabilities" In Cell E53, Calculate Times interest earned using formula "Net Operating Income/ Interest In Cell E54, Calculate Inventory Turnover using formula "Cost of goods sold/ Inventory" In Cell E55, Calculate Total Asset turn Over using formula "Net Sales / Total Assets" In Cell E56, Calculate Operating Profit Margin using formula "Net Operating Income / Net S In Cell E57, Calculate Operating Return on Assets using formula "Net Operating Income / To In Cell E58, Calculate Debt Ratio using formula "( Current Liabilities + Long-term debt) / Tot In Cell E59, Calculate Average Collection Period using formula "( Accounts Receivable * 365 In Cell E60, Calculate Fixed Asset Turnover using formula "Net Sales / Net Fixed Assets " In Cell E61, Calculate Return on Equity using formula "Net Income / Owner's Equity" Given J. P. Robard Mfg., Inc. Balance Sheet ($000) Cash Accounts receivable Inventories Current assets Net fixed assets Total assets Accounts payable Accrued expenses Short-term notes payable Current liabilities Long-term debt Owners’ equity Total liabilities and owners’ equity J. P. Robard Mfg., Inc. Income Statement ($000) Net sales (all credit) Cost of goods sold Gross profit Operating expenses (includes $500 depreciation) Net operating income Interest expense Earnings before taxes Income taxes (40%) Net income Solution Current ratio Times interest earned Inventory turnover Total asset turnover Operating profit margin Operating return on assets Debt ratio Average collection period Fixed asset turnover Return on equity Problem 4-25 ctions to use the Solution Template ge 116 in the yellow colored cells below. a "Current Assets / Current Liabilities" g formula "Net Operating Income/ Interest Expense" ormula "Cost of goods sold/ Inventory" g formula "Net Sales / Total Assets" ing formula "Net Operating Income / Net Sales" s using formula "Net Operating Income / Total Assets" ( Current Liabilities + Long-term debt) / Total Assets" using formula "( Accounts Receivable * 365 ) / Credit Sales " formula "Net Sales / Net Fixed Assets " mula "Net Income / Owner's Equity" Given Solution Q1 SMALLBIZ 20 16 KEEP THE CASH FLOWING AN ENTREPRENEUR’S GUIDE TO MAKING SURE THE MONEY COMING IN ALWAYS TOPS THE MONEY GOING OUT CASE STUDY Illustration by Nicholas Little THE DEBTFREE WAY TO GROW YOUR BUSINESS HOW SPLICE SOFTWARE USED SHREWD NUMBER CRUNCHING AND HUNGRY STARTUP THINKING TO BOOTSTRAP ITS EXPANSION When Tara Kelly expanded her business operations to the U.S. back in 2013, it didn’t cause her to sink into debt. Instead, she dipped into her cash reserve—a sizable cushion that let her open a physical office in Chicago and employ a handful of healthinsured full-time staff. “We knew it was going to be tight, but we wanted to do it ourselves and not take on any debt,” says Kelly, president and CEO of Splice Software, a Calgary-based provider of personalized human voice messages. Splice has been growing since its launch in 2006; indeed, it has earned a spot on the PROFIT 500 ranking of Canada’s FastestGrowing Companies for the past three years. Thanks to rigorous cash-flow practices, Kelly and her team ensure there’s always at least six months’ worth of operating expenses available so the company is not beholden to bankers. That cushion is put in a mostly liquid interest-bearing account, earmarked for growth plans and nasty surprises like deathly slow months. “If not a single soul [paid us], we have the buffer to cover it,” says Kelly. Cash flow is the lifeblood of any business— and also a major killer. According to a 2014 report by BDC, financial management is the biggest challenge facing 47% of small firms in Canada. Being cash-poor puts businesses at risk of missing their most basic obligations, 31 SMALLBIZ such as payroll, rent and loan payments. And that makes it impossible to grow. Splice’s rule of maintaining a six-month reserve is just one way it keeps its coffers full. The company’s forward-thinking approach to cash-f low management makes it a rare beast: a company in growth mode whose ledger never dips into the red. Ongoing, comprehensive communication forms the core of Splice’s money-managing philosophy. The fi rm’s accounting team reviews the ledger with upper management every week and updates its cash-f low projections every month. Considering entrepreneurs aren’t always keen on number crunching—39% of small-business owners surveyed by Intuit Canada in 2015 failed a fi nancial literacy quiz—this step might seem like a slog, but Kelly believes it’s critical for managers to take part in meetings about money. She views it as a good chance not only to assess cuts that need to be made but also to see if there are any opportunities to invest money back in the company. To keep c a sh com i ng i n, Spl ice is no-nonsense about collecting the money it’s owed. The fi rm requires a significant deposit on all pilot projects and requests payment within 30 days. It’s an aggressive approach, and one that works best when a ORIGIN STORY SPLICE SOFTWARE INC. Calgary The impetus for Splice came when CEO TARA KELLY—who was then running her own wellness business— got a “terrible” robocall. She was so put off by the experience that she built a software system to improve the way she communicated with her clients. It worked so well that in 2006, she made it a stand-alone business. Today, Splice has more than $2 million in annual sales, employs 25 people and counts major retail and finance brands among its customers. business can clearly quantify its value to customers, says Becky Reuber, a professor of strategic management at the University of Toronto’s Rotman School of Management. “If you’re a trailblazer in your industry, then people are going to want what you’re selling and they’ll pay up,” she says. To this end, Splice keeps some impressive numbers handy during negotiations: For example, its voice messages reach 95% of all contacts and boast a 30% higher listenership than average. On the accounts payable front, Splice employees frequently negotiate with suppliers to secure payment terms of at least 45 days— 32 April 2016 and they get bonuses when they can stretch the due date even further. This buys more time and maximizes the interest earned on the cash reserve. “You never want to be so aggressive that you hurt your vendors,” explains Kelly. “But once you know how far they’ll go, there’s no reason money has to sit in their bank instead of yours.” Given Splice’s shrewd attention to its balance sheet, it should come as no surprise that its reserve cash is only to be used in exceptional circumstances—and even then, Kelly is adamant about quickly replenishing the fund. For instance, the opening of Splice’s Chicago location slashed the reserve in half, so Kelly promptly informed her employees they needed to drive up revenues and save wherever possible. As a result, the company moved its servers to the Amazon Web Services cloud, which cut its infrastructure costs by 34%. It also published one less promotional white paper than usual, which saved roughly $5,000. The company even nixed regular deliveries of organic fruit—a popular perk—for a month; Kelly and her office managers picked up produce at a local farmers’ market instead, saving the company hundreds of dollars. To keep everyone motivated, she used a thermometer chart to track progress and sent out updates every two weeks. In about a year, the cash reserve was back up to its optimal level. Kelly is confident that staff engagement played a crucial role in this process. “Sometimes as the owner, you think you have to keep [money issues] to yourself or else your staff will be scared,” she says. “But you can’t scale as a team if you aren’t transparent.” Promising a free trip to Mexico doesn’t hurt, either. This year, every employee at Splice will get a seven-day vacation on the company dime if they meet not only their sales targets, but their budget targets, too. Such incentives actually go a long way toward making a company cash-rich, says Brad Cherniak, partner at Sapient Capital Partners, a business advisory firm based in Toronto, because they encourage everyone to think about the bottom line: “It’s like you’re giving everyone oars to row the boat. The more people rowing, the faster the boat goes.” This is the ethos Kelly uses to circumvent the kind of irresponsible spending that ruins so many businesses in expansion mode. “When you grow, it’s easy to get away from that startup mentality because you have more money, but that can make you sloppy,” she says. “You have to live like you’re still starving.” –MAI NGUYEN CHECKUP 10 CASHFLOW RED FLAGS It’s not always clear that a business is about to run out of money. Could any of these statements come from your mouth? We’re currently operating with less than three times our monthly expenditures available as cash in the bank. More than half of our receivables are unpaid 90 days after the date of invoice, despite our best efforts to politely request remittance. We have no formal processes in place to gauge core clients’ ability to pay us. We don’t ask for credit applications before we start work for them and have no way of checking their credit ratings. One of our long-term clients has suddenly started paying us much more slowly than it used to but is ordering more than ever before. Our clients often ask us for extensions on their invoices while they’re waiting to receive money from their own clients. (The business equivalent of, “Don’t worry, buddy, I swear I’ll get you for this pizza later.”) We’ve been in business for more than five years—well past the startup stress zone—but our operating expenses routinely eclipse our gross sales. We can’t create a rolling budget because we don’t have a system in place to accurately collect financial operating data. We’re very reliant on our line of credit for cash flow, and we’ve already had to go to the bank to ask for a limit increase more than once. A major client has told us they don’t care what the cost is, they just want the job done; moreover, they won’t even discuss the expected tally, telling us “we can talk money at the end.” There is little to no communication between our sales and finance departments. –KARA AASERUD Copyright of Canadian Business is the property of Rogers Media Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. ...
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