Title review exs_2021.docx ✅

RMIT Classification: Trusted A. Given the following data: Current assets = 800, Current liabilities = 300; Inventory = 200; Account receivables = 150. Calculate the quick ratio. B. Given the following data: Long-term debt = 100, Value of leases = 15; Book value of equity = 70; Market value of equity = 120, calculate the debt-equity ratio. C. Given the following data: Sales = 3000, Cost of goods sold = 1500, Average receivables = 150, calculate the average collection period. D. HTG has sales of $1000000 and cost of goods sold of 800000. The firm had a beginning inventory of 60000 and an ending inventory of $70000. What is the length of the inventory period? E. A firm has accounts receivables of $30000, inventory of $50000, sales of $370000 and cost of goods sold of $190000. How long does it take the firm to sell its inventory and collect payment on the sale? F. For its most recent year a company had Sales = $800000 and Cost of goods sold = $500000. At the beginning of the year, its Account receivables = $70000 and Account Payables = $120000 and Inventory = 90000 At the beginning of the year, its Account receivables = $80000 and Account Payables = $110000 and Inventory = 100000 Calculate the cash cycle. Question 10. Balance Sheet Assets 2019 2018 Current Assets Income Statement 2019 Cash and marketable securities 600 500 Net sales 48000 Accounts receivable 160 240 Cost of goods sold 32000 Inventories 8200 6500 Selling, general and administrative expenses 12000 Other current assets 210 280 Depreciation 1600 Total current assets 9170 7520 Earnings before interest and taxes (EBIT) ? Interest expenses 300 Fixed Assets Earnings before taxes (EBT) ? Tangible fixed assets Tax (20%) ? Property, plant and equipment 32000 29000 Net Income ? Less accumulated depreciation 8500 7600 Dividend (20%) ? Net tangible fixed assets 23500 21400 Addition to retained earning (80%) ? Long term investment 240 500 Other long-term assets 450 300 Total assets 33360 29720 Liabilities and Shareholders’ Equity 2019 2018 Current liabilities Debt due for repayment 1000 1200 Accounts payable 4400 4000 Other current liabilities 2300 2400 Total current liabilities 7700 7600 Long-term debt 4900 5400 Deffered income taxes 600 700 Other long-term liabilities 800 700 Total liabilities 14000 14400 Common stock and other paid-in-capital 800 900 Retained earnings and capital surplus 18560 14420 Total shareholders’ equity 19360 15320 Total liabilities and shareholders’ equity 33360 29720 a. Fill in the blank (?) of the Income statement. b. Calculate the following financial ratios of year 2019: ROA, ROE, current ratio, quick ratio, Cash cycle (Average days in inventory, Average collection period, Average payment period) c. There are some operational changes that AR period increases by 12 days, inventory period increases by 5 days. The account payable period decreases by 15 days. What should be the new cash conversion cycle? Question 11. A. The supplier offers a credit term 2/15, net 45. What is the cost of forgoing the discount on a $220000 purchase? Question 12.

RMIT Classification: Trusted Question 21. Sales forecasted for 2022 for a firm are as follows: 2022 Q1 2022 Q2 2022 Q3 2022 Q4 Receivables at the start of period ($ million) 180 Sales ($ millions) 600 700 550 200 We assume that sales in 2021 Q4 were $220 million. 2022 Q1 2022 Q2 2022 Q3 2022 Q4 Cash at start of the period ($ million) 40 Sales become accounts receivable before they become cash. Cash flow comes from collections on account receivables. Suppose 60% of sales are cashed in in the immediate quarter and 40% cashed in the following quarter. Use of cash table 2022 Q12022 Q22022 Q32022 Q4 Payments on account payables200190350250 Increase in inventory140140160160 Labor and other expenses120120120120 Capital expenditures60402010 Taxes, interest payment and dividends40404040 Total uses560530690580 a. Calculate receivables at the end period of 2022 b. Construct table showing the cumulative financing requirements in 2022. We assume that the minimum operating cash balance is $20 million. Question 22. ABC is currently experiencing a bad debt ratio of 5%. ABC believes that a tighter credit control can reduce this ratio to 2%. However, sales can drop 10% because of this policy. The cost of goods sol is 75% of the selling price. Per $100 of current sales, what is Tom’s expected profit under the proposed credit standards? Question 23. On April 1 st , a firm had a beginning cash balance of $180. March sales were $400 and April sales were $500. During April, the firm had cash expenses of $140 and payments on account payables of $200. The account receivables period is 30 days. What is the firm’s beginning cash balance on May 1 st ? Question 24. Complete the sources and the uses of cash on February and March February March 1. Total sales 80 90 2. Purchases of materials Cash 30 30 Credit 20 30 3. Other expenses 20 20 4. Taxes, interest,.. 10 10 5. Capital investment 10 0 Sales Purchases Cash: 65% Jan (credit): 20 Credit: 35% Credit duration: 1 month January sales: 80 Minimum cash: 40 Cash at start of February: 50 Question 25. Complete the uses of cash and cumulative financing requirements on February and March February March 1.Purchases of materials Cash 30 30 Credit 20 30 2. Other expenses 10 10 3. Taxes, interest … 10 10 4. Capital investment 10 0