Chapter 2 Solutions Faq Solutions Manual-Books Pdf

Chapter 2 Solutions FAQ Solutions Manual
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Chapter 2 CFIN4, 1 NI EBT 1 0 4, Net income 240 000. Thus EBT 400 000, 1 Tax rate 1 0 40, Taxes 400 000 240 000 160 000. 2 EBIT EBT Interest 400 000 0 400 000, 3 Sales EBIT Operating expenses excluding depreciation Depreciation. 400 000 500 000 100 000 1 000 000, To show that this is the correct result let s start with sales equal to 1 000 000 and compute the. net income, Sales 1 000 000, Operating expenses excluding depreciation 500 000.
Depreciation 100 000, EBIT 400 000, Interest 0, Earnings before taxes EBT 400 000. Taxes 40 160 000, Net income 240 000, Net cash flow Net income Depreciation 240 000 100 000 340 000. 2 7 a Current 3 5 Current assets 73 500, ratio Current liabilities Current liabilities. Current liabilities 21 000, b Quick 3 0 Current assets Inventory 73 500 Inventory. ratio Current liabilities 21 000, Inventory 73 500 3 0 21 000 10 500.
Sales Sales, 2 8 a Total assets turnover 2 0, Total assets 150 000. Sales 2 0 150 000 300 000, Net income Net income, b Return on assets 0 06. Total assets 150 000, Net income 0 06 150 000 9 000. Net income 9 000, Net profit margin 0 03 3 0, Sales 300 000. 2015 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in. whole or in part, Chapter 2 CFIN4, Net income Net income.
2 9 a ROA 0 05, Total assets 300 000, Net income 0 05 300 000 15 000. Net income 15 000, b Return on equity 0 15 15 0, Common equity 300 000 200 000. Alternative solution, Net income Total assets, Return on equity ROA. Common equity Common equity, 0 05 0 05 3 0 0 15 15 0. 300 000 200 000, 2 10 a Debt ratio 40, Proportion of firm Common equity Common equity.
1 0 40 0 6 60, financed with common stock Total assets 750 000. Common equity 750 000 0 6 450 000, Net income Sales Net income. Total assets Total assets Sales, Net income, Net income 0 06. 0 02 2 0 Net profit margin, Alternative solution, Total assets Sales Sales. turnover Total assets 750 000, Sales 3 750 000 2 250 000.
Net income Net income, Total assets 750 000, Net income 0 06 750 000 45 000. Net profit Net income 45 000, margin Sales 2 250 000. Sales Sales, 2 11 a Total assets turnover 2 5, Total assets 10 000. 2015 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in. whole or in part, Chapter 2 CFIN4, Sales 2 5 10 000 25 000. Net income Net income, b Return on assets 0 04, Total assets 10 000.
Net income 0 04 10 000 400, Net income 400, Net profit margin 0 016 1 6. Sales 25 000, Alternative solution, Sales Net income. Return on assets, Total assets Sales, Net income, Net income 0 04. 0 016 1 6 Net profit margin, Current assets 340 000. 2 12 1 Current ratio 5 0, Current liabilities Current liabilities.
Current liabilities 340 000 5 0 68 000, Current assets Inventories 340 000 Inventories. 2 Quick ratio 1 8, Current liabilities 68 000, Inventories 340 000 1 8 68 000 217 600. 3 Current assets Cash Equivalents Accounts receivable Inventories. 340 000 43 000 Accounts receivable 217 600, Accounts receivable 340 000 43 000 217 600 79 400. Cost of goods sold CGS, 4 Inventory turnover 7 0, Inventory 217 600. CGS 7 217 600 1 523 200, 5 CGS 0 80 Sales thus Sales 1 904 000.
Accounts receivable 79 400, 6 DSO 15 days, Sales 360 1 904 000 360. 2 13 a TIE EBIT INT so find EBIT and INT, Interest 200 000 x 0 06 12 000. 2015 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in. whole or in part, Chapter 2 CFIN4, Net income 540 000 x 0 04 21 600. Taxable income EBT 21 600 1 T 21 600 1 0 4 36 000, EBIT 36 000 12 000 48 000. TIE 48 000 12 000 4 0 x, b For TIE to equal 6 0 EBIT 6 0 12 000 72 000.
When EBIT 72 000 Net income 72 000 12 000 1 0 40 36 000. Because NI 0 04 Sales Sales 36 000 0 04 900 000, Check When Sales 900 000 NI 900 000 x 0 04 36 000. EBT 36 000 1 0 40 60 000, EBIT 60 000 12 000 72 000. TIE 72 000 12 000 6 0, 2 14 We are given Common equity 35 000 000 Common shares outstanding 7 000 000. Market price per share 8 Net income 14 000 000, a EPS 14 000 000 7 000 000 2. P E ratio 8 2 4 0, b Book value per share 35 000 000 7 000 000 5.
M B ratio 8 5 1 6, 2 15 We are given ROE 15 TA turnover Sales Total assets 2 0x. Debt Ratio 60, a From DuPont equation ROE ROA x Equity multiplier. 0 15 ROA x Total assets Common equity, Recognize that Total assets Common equity is simply the inverse of the proportion of the firm that is. financed with equity The proportion of the firm that is financed with equity equals 1 Debt ratio. 1 Debt ratio, ROA 0 15 2 5 0 06 6 0, 2015 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in. whole or in part, Chapter 2 CFIN4, b ROA Net profit margin x Total assets turnover.
0 06 Net profit margin x 2 0, Net profit margin 0 06 2 0 0 03 3 0. Alternative solution, TA turnover Sales Total assets 2 0x thus Sales 2 0 Total assets. ROE Net income Common equity Net income 1 0 6 Total assets 0 15 thus. Net income 0 15 0 4 Total assets 0 06 Total assets. Net income 0 06 Total assets 0 06, PM 0 03 3 0, Sales 2 0 Total assets 2 0. 2 16 We are given ROA 8 Total assets 440 000, Debt Ratio 20. Net income Net income, a ROA 0 08, Total assets 440 000.
Net income 0 08 440 000 35 200, b From DuPont equation ROE ROA x Equity multiplier. Total assets 1 1, Equity multiplier 1 25, Common equity 1 Debt ratio 1 0 20. Thus ROE 0 08 x 1 25 0 10 10 0, Alternative solution. Common equity 440 000 1 0 2 352 000, Net income 35 200. ROE 0 10 10 0, Common equity 352 000, 2 17 We are given ROA 4 Current assets 260 000.
Net income 140 000 Long term debt 1 755 000, assets financed with equity 35. Net income 140 000, 1 ROA 0 04 Total assets 140 000 0 04 3 500 000. Total assets Total assets, 2 Total liabilities Total assets Debt ratio 3 500 000 1 0 35 2 275 000. 3 Current liabilities Total liabilities Long term debt 2 275 000 1 755 000 520 000. 2015 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in. whole or in part, Chapter 2 CFIN4, Current assets 260 000. 4 Current ratio 0 5, Current liabilities 520 000, 2 18 We are given ROA 3 ROE 5 Total assets 100 000.
Net income Net income, a ROA 0 03 Net income 100 000 0 03 3 000. Total assets 100 000, Net income 3 000, b ROE 0 05 CE 3 000 0 05 60 000. Common equity Common eqiuty, Total liabilities 100 000 60 000. Debt ratio 0 40 40, Total assets 100 000, 2 19 We are given assets financed with equity 60 Current ratio 5 0. Total assets turnover 4 0 Current assets 150 000, Sales 1 800 000.
Current assets 150 000, 1 Current ratio 5 0, Current liabilities Current liabilities. Current liabilities 150 000 5 30 000, Sales 1 800 000. 2 Total assets turnover 4 0, Total assets Total assets. Total assets 1 800 000 4 0 450 000, 3 Total liabilities 450 000 1 0 60 180 000. 4 Long term liabilities 180 000 30 000 150 000, 2 20 We are given P E ratio 15 0 Price per share 30.
Fixed assets turnover 8 0 Current ratio 5 0, Current liabilities 300 000 Net profit margin 0 04. Shares of common 60 000, Pr ice per share 30, 1 P E ratio 15 0 EPS 30 15 2. Net income 60 000 2 120 000, Net income 120 000, 2 Net profit margin 0 04 Sales 120 000 0 04 3 000 000. Sales Sales, Fixed assets Sales 3 000 000, 3 8 0 Fixed assets 3 000 000 8 375 000. turnover Net fixed assets Fixed assets, 2015 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in.
whole or in part, CFIN 4 4th Edition Besley Solutions Manual. Full Download http testbanklive com download cfin 4 4th edition besley solutions manual. Chapter 2 CFIN4, Current Current assets CA, 4 5 0 Current assets 300 000 5 1 500 000. ratio Current liabilities 300 000, 5 Total assets Fixed assets Current assets 375 000 1 500 000 1 875 000. Net income 120 000, a ROA 0 064 6 4, Total assets 1 875 000. Total assets Sales 3 000 000, turnover Total assets 1 875 000.
2015 Cengage Learning All Rights Reserved May not be scanned copied or duplicated or posted to a publicly accessible website in. whole or in part, Full download all chapters instantly please go to Solutions Manual Test Bank site testbanklive com. Chapter 2 Solutions 2 1 Publically traded companies are required to provide adequate financial information to their shareholders Information generally is provided through financial reports that a company periodically produces which include a balance sheet an income statement a statement of cash flows and a statement of retained earnings In addition the reports published by a company

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