6- Consider the following financial statements (in millions of TL). In 2016, the company did not...

 

   

 

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6- Consider the following financial statements (in millions of TL). In 2016, the company did not pay any dividends. If this is the case, what was the retained earnings at the end of year 2015? Income Statement (2017) Balance Sheet (2017) Credit Sales 1.500 Cash ? Accounts Payable ? Cost of Goods Sold ? Accounts Receivable ? Short-Term Debt 125 Taxable Income ? Inventory ? Long-Term Debt 845 Taxes (34%) ? Fixed Assets 2.092 Common Stock 845 Net Income ? Retained Earnings 1.132 Total ? Total Dividend (33.33%) Retained Earnings ?? Main assumptions: Sales has increased by 25% in 2017. "Cost of goods sold" is 80% of sales in the income statement at all times. All other items are independent of sales. Each current asset and accounts payable are fractions of sales in the balance sheet. All other items are independent of sales. Current ratio is 3, accounts receivable turnover is 2, inventory turnover is 4, accounts payable turnover is 5 at all times. Turnovers are calculated with respect to the current period balances without averaging with past year balances. Throughout the year 2017: the company raised funds through short-term debt first. the company raised the remaining funds through 50% long-term debt and 50% equity offering (common stock). 7- Refer to Question 6. What is the cash conversion cycle in year 2017? (1 year = 360 days) 8- Refer to Question 6 and 7. Suppose that the company wants to double each turnover rates in year 2018. With this improvement, the company would like to pay some of its short-term and long-term debts. Assuming that all main assumptions are still valid in 2018 except for the fund raising activities (the last two bullets), what would be the total debt in the 2018 balance sheet? 6- Consider the following financial statements (in millions of TL). In 2016, the company did not pay any dividends. If this is the case, what was the retained earnings at the end of year 2015? Income Statement (2017) Balance Sheet (2017) Credit Sales 1.500 Cash ? Accounts Payable ? Cost of Goods Sold ? Accounts Receivable ? Short-Term Debt 125 Taxable Income ? Inventory ? Long-Term Debt 845 Taxes (34%) ? Fixed Assets 2.092 Common Stock 845 Net Income ? Retained Earnings 1.132 Total ? Total Dividend (33.33%) Retained Earnings ?? Main assumptions: Sales has increased by 25% in 2017. "Cost of goods sold" is 80% of sales in the income statement at all times. All other items are independent of sales. Each current asset and accounts payable are fractions of sales in the balance sheet. All other items are independent of sales. Current ratio is 3, accounts receivable turnover is 2, inventory turnover is 4, accounts payable turnover is 5 at all times. Turnovers are calculated with respect to the current period balances without averaging with past year balances. Throughout the year 2017: the company raised funds through short-term debt first. the company raised the remaining funds through 50% long-term debt and 50% equity offering (common stock). 7- Refer to Question 6. What is the cash conversion cycle in year 2017? (1 year = 360 days) 8- Refer to Question 6 and 7. Suppose that the company wants to double each turnover rates in year 2018. With this improvement, the company would like to pay some of its short-term and long-term debts. Assuming that all main assumptions are still valid in 2018 except for the fund raising activities (the last two bullets), what would be the total debt in the 2018 balance sheet?

Answer rating: 100% (QA)

To find the retained earnings at the end of year 2015 we can work backward from the Retained Earning... View the full answer