1 Problem 14-1 (Static) 9.09 points eBook Print References Required: Use the financial statements of Heifer...

Transcribed Image Text:

1 Problem 14-1 (Static) 9.09 points eBook Print References Required: Use the financial statements of Heifer Sports Incorporated in Table 14.14 to find the following: (Use 365 days a year. Round your dollar answers to nearest whole dollar amounts and all other answers to 2 decimal places.) a. Inventory turnover ratio. b. Debt/equity ratio. c. Cash flow from operating activities. d. Average collection period. e. Asset turnover ratio. f. Interest coverage ratio. g. Operating profit margin. h. Return on equity. i. Compound leverage ratio. % % TABLE 14.14 Heifer Sports financial statements Income statement Sales Cost of goods sold Depreciation Selling & administrative expenses EBIT Interest expense Taxable income Taxes Net income 2021 $ 5,500,000 2,850,000 280,000 1,500,000 $870,000 130,000 $ 740,000 330,000 $ 410,000 Balance sheet, year-end Assets Cash Accounts receivable Inventory Total current assets Fixed assets Total assets Liabilities and Shareholders' Equity Accounts payable Short-term debt Total current liabilities Long-term bonds Total liabilities Common stock Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 2021 $ 50,000 660,000 490,000 $ 1,200,000 3,100,000 $ 4,300,000 $ 340,000 480,000 $ 820,000 2,520,000 $ 3,340,000 $310,000 650,000 $960,000 $ 4,300,000 2020 $ 40,000 690,000 480,000 $ 1,210,000 2,800,000 $ 4,010,000 $ 450,000 550,000 $ 1,000,000 2,200,000 $ 3,200,000 $310,000 500,000 810,000 $ 4,010,000 2 9.09 points eBook Print Problem 14-2 (Algo) The following table shows cash flow data for Rocket Transport. Cash dividend Purchase of bus Interest paid on debt Sales of old equipment Repurchase of stock Cash payments to suppliers Cash collections from customers Required: $ 82,000 $ 37,000 $ 27,000 $ 74,000 $ 59,000 $ 97,000 $ 320,000 a. Find the net cash provided by or used in investing activities. References Cash from investments b. Find the net cash provided by or used in financing activities. (Negative amount should be indicated by a minus sign.) Cash from financing c. Find the net increase or decrease in cash for the year. Total cash flow 7 Problem 14-12 (Algo) 9.09 points eBook Required: Use the DuPont system and the following data to find return on equity. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Leverage ratio Total asset turnover Net profit margin Dividend payout ratio 2.8 2.6 6.1% 33.0% Print Return on equity References % 9.09 points Problem 14-13 (Algo) Required: A firm has an ROE of 4%, a debt/equity ratio of 0.5, and a tax rate of 30%, and pays an interest rate of 8% on its debt. What is its operating ROA? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 00 8 ROA eBook Print References % 9.09 9 points Problem 14-14 (Algo) Required: A firm has a tax burden ratio of 0.6, a leverage ratio of 1.65, an interest burden of 0.7, and a return on sales of 10%. The firm generates $3 in sales per dollar of assets. What is the firm's ROE? (Do not round intermediate calculations. Round your answer to 2 decimal place.) eBook Print References ROE % 10 Problem 14-15 (Algo) 9.09 points eBook Print References An analyst gathers the following information about Meyer, Incorporated: Meyer has 1,000 shares of 10% cumulative preferred stock outstanding, with a par value of $100 and liquidation value of $110. Meyer has 20,000 shares of common stock outstanding, with a par value of $20. Meyer had retained earnings at the beginning of the year of $5,550,000. Net income for the year was $81,000. This year, for the first time in its history, Meyer paid no dividends on preferred or common stock. Required: a. Calculate the total book value of Meyer's common stock. Total book value b. What is the book value per share of Meyer's common stock? (Round your answer to 2 decimal places.) Book value per share 11 Here are data on two firms: 9.09 points Acme Apex Equity ($ million) 200 410 Debt ROC ($ million) (%) 150 190 18 16 eBook Cost of Capital (%) 12 13 Required: a-1. Calculate the economic value added? (Do not round intermediate calculations. Enter your answers in millions) Acme Apex Economic value added million million Print References a-2. Which firm has the higher economic value added? Apex Acme b-1. Calculate the economic value added per dollar of invested capital? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Economic value added Acme Apex b-2. Which has higher economic value added per dollar of invested capital? Acme 1 Problem 14-1 (Static) 9.09 points eBook Print References Required: Use the financial statements of Heifer Sports Incorporated in Table 14.14 to find the following: (Use 365 days a year. Round your dollar answers to nearest whole dollar amounts and all other answers to 2 decimal places.) a. Inventory turnover ratio. b. Debt/equity ratio. c. Cash flow from operating activities. d. Average collection period. e. Asset turnover ratio. f. Interest coverage ratio. g. Operating profit margin. h. Return on equity. i. Compound leverage ratio. % % TABLE 14.14 Heifer Sports financial statements Income statement Sales Cost of goods sold Depreciation Selling & administrative expenses EBIT Interest expense Taxable income Taxes Net income 2021 $ 5,500,000 2,850,000 280,000 1,500,000 $870,000 130,000 $ 740,000 330,000 $ 410,000 Balance sheet, year-end Assets Cash Accounts receivable Inventory Total current assets Fixed assets Total assets Liabilities and Shareholders' Equity Accounts payable Short-term debt Total current liabilities Long-term bonds Total liabilities Common stock Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 2021 $ 50,000 660,000 490,000 $ 1,200,000 3,100,000 $ 4,300,000 $ 340,000 480,000 $ 820,000 2,520,000 $ 3,340,000 $310,000 650,000 $960,000 $ 4,300,000 2020 $ 40,000 690,000 480,000 $ 1,210,000 2,800,000 $ 4,010,000 $ 450,000 550,000 $ 1,000,000 2,200,000 $ 3,200,000 $310,000 500,000 810,000 $ 4,010,000 2 9.09 points eBook Print Problem 14-2 (Algo) The following table shows cash flow data for Rocket Transport. Cash dividend Purchase of bus Interest paid on debt Sales of old equipment Repurchase of stock Cash payments to suppliers Cash collections from customers Required: $ 82,000 $ 37,000 $ 27,000 $ 74,000 $ 59,000 $ 97,000 $ 320,000 a. Find the net cash provided by or used in investing activities. References Cash from investments b. Find the net cash provided by or used in financing activities. (Negative amount should be indicated by a minus sign.) Cash from financing c. Find the net increase or decrease in cash for the year. Total cash flow 7 Problem 14-12 (Algo) 9.09 points eBook Required: Use the DuPont system and the following data to find return on equity. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Leverage ratio Total asset turnover Net profit margin Dividend payout ratio 2.8 2.6 6.1% 33.0% Print Return on equity References % 9.09 points Problem 14-13 (Algo) Required: A firm has an ROE of 4%, a debt/equity ratio of 0.5, and a tax rate of 30%, and pays an interest rate of 8% on its debt. What is its operating ROA? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 00 8 ROA eBook Print References % 9.09 9 points Problem 14-14 (Algo) Required: A firm has a tax burden ratio of 0.6, a leverage ratio of 1.65, an interest burden of 0.7, and a return on sales of 10%. The firm generates $3 in sales per dollar of assets. What is the firm's ROE? (Do not round intermediate calculations. Round your answer to 2 decimal place.) eBook Print References ROE % 10 Problem 14-15 (Algo) 9.09 points eBook Print References An analyst gathers the following information about Meyer, Incorporated: Meyer has 1,000 shares of 10% cumulative preferred stock outstanding, with a par value of $100 and liquidation value of $110. Meyer has 20,000 shares of common stock outstanding, with a par value of $20. Meyer had retained earnings at the beginning of the year of $5,550,000. Net income for the year was $81,000. This year, for the first time in its history, Meyer paid no dividends on preferred or common stock. Required: a. Calculate the total book value of Meyer's common stock. Total book value b. What is the book value per share of Meyer's common stock? (Round your answer to 2 decimal places.) Book value per share 11 Here are data on two firms: 9.09 points Acme Apex Equity ($ million) 200 410 Debt ROC ($ million) (%) 150 190 18 16 eBook Cost of Capital (%) 12 13 Required: a-1. Calculate the economic value added? (Do not round intermediate calculations. Enter your answers in millions) Acme Apex Economic value added million million Print References a-2. Which firm has the higher economic value added? Apex Acme b-1. Calculate the economic value added per dollar of invested capital? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Economic value added Acme Apex b-2. Which has higher economic value added per dollar of invested capital? Acme