A company reported the following information in its financial statements: total assets 100,000, total liabilities 30,000, and
Question:
A company reported the following information in its financial statements:
total assets 100,000, total liabilities 30,000, and retained earnings 45,000
net working capital 25,000
sales revenues 180,000 and earnings before interest and depreciation (EBIT) 72,000
the number of shares outstanding 10,000 thousand shares and the equity price $13.5 per share.
All figures are given in thousand dollars, except for the number of shares and the per-share price. Compute Altman’s Z score defined as follows:
Z score=1.2NWCassets+1.4retained earningsassets+3.3EBITassets+0.6market value of equityliabilities+1.0salesassets
Answer (show the steps/calculation toward your results):
use the information about Green Energy Source Inc. (“GES”) provided below.
GES Inc. balance sheet:
FYE 2071 | FYE 2070 | |
Assets: | ||
Cash & cash equivalents | 7,000 | 5,000 |
Accounts receivable | 18,000 | 14,000 |
Inventories | 13,000 | 11,000 |
Other current assets | 15,000 | 17,000 |
Plant & equipment, net | 600,000 | 420,000 |
Intangible assets, net | 15,000 | 36,000 |
Total assets | $680,000 | $503,000 |
Liabilities & equity: | ||
Accounts payable | 24,000 | 21,000 |
Current portion of long-term debt | 42,000 | 2,000 |
Other current liabilities | 4,000 | 2,000 |
Long-term liabilities | 420,000 | 290,000 |
Stockholders’ equity | 190,000 | 188,000 |
Total liabilities & equity | $680,000 | $503,000 |
GES Inc. income statement:
FY 2071 | |
Sales revenues | $820,000 |
Cost of good sold | 510,000 |
Sales, general & admin. expenses | 110,000 |
EBIT | 200,000 |
Interest expense | 120,000 |
Income tax expense | 20,000 |
Net income | 60,000 |
Use the information about GESInc. provided above to answer questions (a) and (b).
Calculate the firm’s current ratio for FY 2070.
Answer (show the steps/calculation toward your results):
Calculate the current ratio for FY 2071 and provide the main reason for the change in the ratio from FY 2070 to FY 2071.
Answer (show the steps/calculation toward your results):
Use the information about GESInc. provided above to answer questions (a) and (b).
Calculate the turnover ratios, respectively, for accounts receivable, inventories, and accounts payable for FY 2071.
*Use average balance for all B/S items and use the definitions introduced in the class.
Answer (show the steps/calculation toward your results):
Calculate the days accounts receivable, days inventory turnover, and days accounts payable.
Answer (show the steps/calculation toward your results):
Expert Answer:
Answer 1 The firms current ratio for FY 2070 is 2 2 The current ratio for FY 2071 is 25 The main reason for the change in the ratio from FY 2070 to FY ... View the full answer
