QUESTION 7 How about some more balance sheet math? Consider a firm with Total Liabilities of $5,445, total current liabilities of $215, (potes payable of $749 and acertats of $1,932). The firm also has Accounts Payable. What is the firm's Total Long Term Liabilities? You answer should be in dollars (example: $300 or 300 are both acceptable) On your own... think about how the firm's Total Liabilites is different than the firm's Total Debt See Section 3-2A for details on this comparison Announcement: This question includes conflicting information (crossed out), which cannot be corrected since the question is locked. All students will receive full credit for this question. You should still give it a good attempt :) QUESTION 8 One More practice for balance sheet math? Consider a firm with Current Liabilities of $487, Long Term Debt of $2,674, Net Fixed Assets of $919 and Total Common Equity of $358. What is the firm's Current Assets? Hint Start by finding the firm's Total Liabilities and Equity. Next remember this equals Total Assets. Now subtract Net Fixed Assets to find Current Assets You answer should be in dollars (example: $300 or 300 are both acceptable) On your own... think about how the firm's Total Liabilites is different than the firm's Total Debt See Section 3-2A for details on this comparison QUESTION 9 Taking a closer look at the Balance Sheet-Read Section 3-2A (1. Cash versus other assets, 2. Working Capital, and 3. Total debt versus total liabilities) Then answer the next several questions. The term "working capital" refers to current assets. You can think of those assets as capital that works throughout the year. The term "net" often refers to cases when costs or other items, like liabilities) are subtracted out. So Net Working Capital represent Current Assets net of Current Liabilities. Solve for the networking capital below by following three steps 1. Consider a firm with $737 in Cash, S1,387 in Accounts Receivable, $3,516 in Inventory, 56,495 in Property, Plant and Equipment. Calculate the Current Assets of the firm . (be careful about what is included in Current Assets) 2. The same firm has $159 in Accurals, $665 in Accounts Payable, $3,077 in Notes Payable, $8.998 in Long term Debt and $2.994 in Retained Earnings. Calculate the Current Liabilities of the firm (be careful about what is included in Current Liabilities) 3. Now that you have Current Assets and Current Liabilites, use the formula from Section 3-2A to find Net Working Capital Net Working Capital = Current Assets - Current Liabilities Include your asnwer in dollars with no decimal example ($5040 or 5040 are both acceptable notation) QUESTION 10 Sometimes, we are interested in financial items that focus on the firm's operations. In these cases, we want to abstract some of the financing decisions, like debt and equity related items. See Section 3-2A Working Capital. In this course "Excess Cash" will be zero since this is a subjective estimation Solve for the net operating working capital below by following three steps 1. Consider a firm with $577 in Cash, $2,395 in Accounts Receivable, $4.932 in Inventory, S7, 119 in Property, Plant and Equipment Calculate the Current Assets of the firm o be careful about what is included in Current Assets) 2. The same firm has $487 in Accurals, $995 in Accounts Payable, $5,198 in Long term Debt and $2,769 in Retained Earnings. Calculate the Current Liabilities of the firm excluding notes payable o be careful about what is included in Current Liabilities) What if you were given that current liabilities were $2,194 and notes payable were $555, can you find current liabilities excluding notes payable in this case? 3. Now that you have Current Assets and Current Liabilites without notes payable, use the formula from Section 3-2A to find Net Operating Working Capital o Net Working Capital = Current Assets - (Current Liabilities - Notes) o Net Working Capital = Current Assets - (Accruals + Accounts Payable) Include your asnwer in dollars with no decimal example ($5040 or 5040 are both acceptable notation) QUESTION 11 Watch the Concept Clip called Net Working Capital vs. Net Operating Working Capital in Section 3-2A (you have to scroll down to the bottom of that section) Determine whether the following statement is true or false: Net Operating Working Capital is a measure of firm Liquidity O True O False