Financial Analysis With Microsoft Excel 2002 3rd Edition Timothy R. Mayes, Todd M. Shank - Solutions

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Why are notes to the consolidated financial statements important?
What is the Balance Sheet information for the year compared to?
Why is a company’s core values and culture important to mention in its annual report?
Name two types of agencies or organizations that monitor the financial information contained in Corporate Annual Reports.
What is the difference between a consolidated hotel budget and a department budget?
Why is the annual operating budget one of the most important financial reports for a hospitality manager to know, understand, and use?
Why are weekly forecasts so important to managing a business’s profitability?
What is the formula for forecasting the hourly wage expense?
What are the formulas for room revenue forecasts and restaurant forecasts?
How is it used in the operation of and financial analysis of a hotel?
Name one important ratio from each of the five ratio classifications, and tell why you think it is important in financial analysis.
What selling strategy should a hotel implement when the booking pace is under the historical average pace?
List three formulas for calculating labor productivities and percentages.
How do department managers use retention and flow thru to manager their departments?
Define retention and flow thru. Why they are important?
How are weekly revenue forecasts used to plan expenses for the upcoming week?
List four characteristics of the Statement of Cash Flow.
Why is an increase in accounts payable a source of funds? Give an example.
Name the three classifications of cash flow.
Identify at least one hotel department that each Executive Committee Member is responsible for.
Refer to the hotel organization chart in Chapter
Draw the format for a Department P&L using the three sections in question 4.
Draw the format for a Consolidated P&L using the three sections in question 4.
Name the three sections of the format for a P&L.
What is the most important financial report for hotel department managers that is prepared monthly by the accounting department?
Problems 1 through 4 represent the second step in the financial management cycle.The following questions represent the third step—analyzing the numbers.a. For the Lumberjack Hotel, discuss the actual January performance, including dollar and percentage change. Include comparisons of actual with
Calculate the cost and profit percentages for General Electric for 2003 and 2002.2003 2003 Percentage 2002 2002 Percentage Total Revenues $134,187 $132,210 Cost of Goods Sold 37,189 38,833 Cost of Services Sold 14,017 14,023 Interest, financial charges 10,432 10,216 Other Costs and Expenses 52,645
Following is the revenue from continuing operations from the Marriott International 2003 annual report (in millions):2003 Mix Percentage 2002 Mix Percentage 2001 Mix Percentage Full Service $5,876 $5,508 $5,260 Select Service $1,000 $ 967 $ 864 Extended Stay $ 557 $ 600 $ 635 Time Share $1,279
The following financial information is from the Darden Restaurants 2003 annual report:Number of Sales Mix Percentage Restaurants Mix Percentage Red Lobster $2,430,000,000 673 Olive Garden $1,990,000,000 524 Bahama Breeze $ 138,000,000 34 Smokey Bones $ 93,000,000 39 Totalsa. What was the total
Following are the financial results for January for the Lumberjack Hotel:Actual Budget Last Year Room Revenue $ 695,000 $ 680,000 $ 650,000 Room Profit $ 500,000 $ 486,000 $ 460,000 Average Room Rate $ 67.50 $ 68.00 $ 65.66 Rooms Sold 10,300 10,000 9,900 Occupancy Percent 83.1% 80.1%
Name the four types of trends used in financial analysis. Give examples.
Name the four types of percentages used in financial analysis. Give examples.
Name five reports or financial documents the actual financial performance is compared to.
What are the two ways numbers are used in financial analysis? Give examples.
Why is the P&L Statement the most important for a hospitality manager to understand?
What are three key measurements of the performance of a business?
Name and describe three profit levels in a hotel.
List the important characteristics for each of these statements, including the important accounts in each.
Name and describe the three main financial statements of a business.
Suppose that in August 1997 you purchased shares in Staples, Inc. (NASDAQ: SPLS). It is now five years later and you decide to evaluate your holdings to see if you have done well with this investment. The table below shows the market prices of SPLS.a. Enter the data, as shown, into a worksheet and
Repeat Problem 2 using the data below for Loweís Companies, Inc. However, this time you should create a copy of your worksheet to use as a template. Replace the data for Bed Bath &Beyond with that of Loweís.a. Do you think that Loweís can maintain the current growth rates of sales and net income
Explain the purpose and understand the format of the firmís three basic financial statements: the income statement, the balance sheet, and the statement of cash flows. L01
Construct each of these statements in Excel with data for any company. L01
Link worksheets together so that formulas in one worksheet can reference data in another. L01
Use Excelís ìOutlineî tool to selectively display or hide parts of a financial statement.? L01
How to proceed from this point is largely a matter of preference. We could move line by line through the income statement, entering a label followed by the value.An alternative is to enter all of the labels and then all of the numbers. The second method is preferable at this point so that we may
Using the data presented below:Aspen Industries Income Statement For the Years Ended December 31, 2004 and 2003 2004 2003 Sales 285,000 190,000 Cost of Goods Sold 215,000 143,000 Gross Profit 70,000 47,000 Operating Expenses Variable Expenses 28,500 19,000 Fixed Expenses 21,000 20,000 Depreciation
EdgarScan is a service of the ABAS Technology Group of PricewaterhouseCoopers which provides free access to all filings made by public companies in the United States. The site can be accessed at http://edgarscan.pwcglobal.com/servlets/edgarscan.EdgarScan makes it easy to download financial
Explain the purpose of the cash budget and how it differs from an income statement. L01
Calculate a firmís expected total cash collections and disbursements for a particular month. L01
Calculate a firmís expected ending cash balance and short-term borrowing needs. L01
Demonstrate how Excel can be used to determine the optimal timing of major cash expenditures. L01
Use the Scenario Manager to evaluate different assumptions in a model. L01
Use the various tools that Excel provides to find and fix errors in formulas. L01
Huggins and Griffin Financial Planners have forecasted revenues for the first six months of 2005 as shown in the following table.The firm collects 60% of its sales immediately, 39% one month after the sale, and 1% are written off as bad debts two months after the sale. The firm assumes that wages
You have recently been hired to improve the financial condition of Idaho Springs Hardware, a small chain of three hardware stores in the mountain communities of Colorado. On your first day the owner, Chuck Vitaska, told you that the biggest problem facing the firm has been periodic unexpected cash
Describe what financial ratios are and who uses them. L01
Define the five major categories of ratios (liquidity, efficiency, leverage, coverage, and profitability). L01
Calculate the common ratios for any firm by using income statement and balance sheet data. L01
Use financial ratios to assess a firmís past performance, identify its current problems, and suggest strategies for dealing with these problems. L01
Calculate the economic profit of a firm. L01
The leader in this effort is the consulting firm Stern Stewart and Company who refer to economic profit by the copyrighted name Economic Value Added (EVA). L01
Economic profit is also measured by NPV, which is introduced in Chapter 10. The primary difference is that in this chapter we are trying to calculate the actual economic profit that was earned over some previous time period (usually the previous year). NPV measures the expected economic profit of a
Chapter 9 covers the calculations necessary to calculate a firmís after-tax weighted average cost of capital. L01
Explain how the ìpercent of salesî method is used to develop pro-forma financial statements, and how to construct such statements in Excel. L01
Use the TREND function for forecasting sales or any other trending variables. L01
Perform a regression analysis with Excelís built-in regression tools. L01
Since you are reading this after the end of Proctor & Gambleís fiscal year 2003, how do your forecasts from the previous problems compare to the actual FY 2003 results? Does it appear that more information would have helped to generate better forecasts? Insert Proctor & Gambleís actual sales for
Choose your own company and the repeat the analysis from Problem 1. You can get the data from MoneyCentral Investor at http://moneycentral.msn.com/investor/home.asp. To retrieve the data for your company, go to the Stocks area and enter the ticker symbol. Now choose Financial Results and then
Differentiate between fixed and variable costs.
Calculate operating and cash break-even points, and find the number of units that need to be sold to reach a target level of EBIT.
Define the terms ìbusiness riskî and ìfinancial risk,î and describe the orgins of each of these risks.
Use Excel to calculate the DOL, DFL, and DCL and explain the significance of each of these risk measures.
Explain how the DOL, DFL, and DCL change as the firmís sales level changes.
Explain the concept of the time value of money. L01
Calculate the present value and future value of a stream of cash flows using Excel. L01
Explain the types of cash flows encountered in financial analysis, and how to adjust for each type in making time value calculations in Excel. L01
Differentiate between the alternative compounding periods, and use Excel to compare present and future values under different compounding schemes. L01
Upon starting your new job after college, youíve been confronted with selecting the investments for your 401k retirement plan.You have four choices for investing your money:• A money market fund which has historically returned about 5% per year.• A long-term bond fund which has earned an
Given the following set of cash flows:a. If your required rate of return is 12% per year, what is the present value of the above cash flows? Future value?b. Now, suppose that you are offered another investment that is identical, except that the cash flows are reversed (i.e., cash flow 1 is 4,000,
Your five-year-old daughter has just announced that she would like to attend college. Your best guess is that it will cost approximately $25,000 per year (for four years) in tuition, books,rent, etc. for her to attend State College 13 years from now. You believe that you can earn a rate of 9% on
Differentiate among the definitions of ìvalueî and explain the importance of intrinsic value in making financial decisions. L01
Explain how intrinsic value is calculated by considering the size, timing, and perceived riskiness of the cash flows. L01
Explain the concept of ìrequired rate of returnî and calculate this rate using the Capital Asset Pricing Model (CAPM). L01
Show how any security (common or preferred stocks, bonds, etc.) can be valued in Excel or by hand. L01
Calculate the various bond return measures in Excel. L01
What are the expected cash flows? L01
When will the cash flows occur? L01
What is the required rate of return for this particular stream of cash flows? L01
As an analyst at Churnem & Burnem Securities, you are responsible for making recommendations to your firmís clients regarding common stocks. After gathering data on Denver Semiconductors, you have found that their dividends have been growing at a rate of 10% per year to the current (D0) rate of
As an investor, you are considering an investment in the bonds of the Conifer Coal Company. The bonds, which pay interest semiannually, will mature in eight years, and have a coupon rate of 9.5% on a face value of $1,000. Currently, the bonds are selling for $872.a. If your required return is 11%
Using the Yahoo! Finance Web site (http://finance.yahoo.com)get the current price and five-year dividend history for Albertsons, Inc. To gather this data, enter the ticker symbol(ABS), choose Chart from the drop-down list of quote types, and click the Get Quotes button. At the bottom of the chart,
Using the Bond Screener at the Yahoo! Finance Web site (http://bonds.yahoo.com/search.html), find a AAA rated corporate bond with at least 12 years to maturity. Click the link to get more detailed information on your chosen bond, and then set up a worksheet to answer the following questions. Note
Define ìhurdle rateî and show how it relates to the firmís Weighted Average Cost of Capital (WACC). L01
Calculate the WACC using both book- and market-value weights. L01
Calculate component costs of capital with flotation costs and taxes. L01
Explain how and why a firmís WACC changes as total capital requirements change.
Use Excel to calculate the ìbreak-pointsî in a firmís marginal WACC curve, and graph this curve in Excel. L01
TRM Consulting Services currently has the following capital structure:Debt is represented by 15 year original maturity bonds, issued 5 years ago with a coupon rate of 9%, which are currently selling for $945. The bonds pay interest semiannually. The preferred stock pays an $11 dividend annually,
Suppose that TRM Consulting Services has discussed its need for capital with its investment bankers. The bankers have estimated that TRM can raise new funds in the capital markets under the following conditions:a. Using the information developed in the previous problem, calculate each of the

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Financial Analysis With Microsoft Excel 2002 3rd Edition Timothy R. Mayes, Todd M. Shank - Solutions

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