Exam 1 Practice Questions 1. Managerial finance: A) involves tasks such as budgeting‚ financial forecasting‚ cash management‚ and funds procurement. B) involves the design and delivery of advice and financial products. C) recognizes funds on an accrual basis. D) devotes the majority of its attention to the collection and presentation of financial data. 2. Johnson‚ Inc. has just ended the calendar year making a sale in the amount of $10‚000 of merchandise purchased during the year at a total
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Problem Statement The problem that the firm Guna Fibres is facing is that they lack sufficient cash flow from operations to meet their day-to-day financial obligations. Guna Fibres has become dependent on a revolving line of credit from the All-India Bank & Trust Company and due to increasing operating expenses and costs of good sold Guna Fibres is no longer able to remain solvent based on their current financial practices. Situation Analysis Guna Fibres is a textile manufacturing company
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type of information. This paper will discuss four different types of financial statements and how they are utilized by vendors‚ creditors and others. The four financial statements that will be reviewed are the income statement‚ balance sheet‚ cash flow statements and statement of retained earnings. Income Statement Beginning with the income statement‚ the information provided includes the amount of revenue that the company earns over a certain period of time. The period of time is usually a
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The Annual Report Project General Electric Company (GE) General Electric‚ short as GE‚ is a leading multi-industrial company involving in energy‚ appliance‚ finance and transportation businesses. It has more than 100 years of history‚ and generally be viewed as one of the most successful product and service providers across continents. GE has gross revenue of more than 147 billion dollars‚ and is currently ranking No.6 in Fortune 500 U.S. by revenue. A. Introduction General Electric
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Week 6 Intermediate Accounting III Professor: James Ridilla Table of Contents Introduction 3 Deferred Taxes 3-5 Retirement plan 5-6 Share-based Compensation 6 Earnings per Share 6-7 Cash Flow Statement 7-8 Overall Analysis 8 Citations 9 Texas Instruments is famous for handheld scientific calculators; yet they are a company that has their hand in so much more! TI designs and sells semiconductors to
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History and development...................................................................4 Introduction........................................................................................5 Operating return on equity..................................................................5 Cash flow statement...........................................................................7 Investor ratios.....................................................................................8 Conclusion
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Chapter 1 A Framework for Business Analysis and Valuation Using Financial Statements 3. Joe Smith argues that “learning how to do business analysis and valuation using financial statements is not very useful‚ unless you are interested in becoming a financial analyst.” Comment. Business analysis and valuation skills are useful not only for financial analysts but also for corporate managers and loan officers. Business analysis and valuation skills help corporate managers in several ways.
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32 0.41 Interest Cover 3.54 8.01 8.22 Liquidity Ratios 1994 1995 1996 Current Ratio 3.23 2.65 2.48 Quick Ratio 1.31 1.02 1.16 Acid Test Ratio 1.31 1.02 1.16 Profitability Ratios 1994 1995 1996 EBITDA margin 8.5% 11.9% 15.9% Operating margin 7.2% 10.8% 14.9% Net Profit margin 4.9% 7.4% 8.5% Return on Total Assets 9.9% 19% 21.4% Return on Equity 22.1% 36% 39.7% Du – Pont Analysis 1994 1995 1996 Net Profit/Sales 4.9% 7.4% 8.5% Sales/Assets 1.96 2.37 1.89 Assets/Equity
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ABC is a start-up firm‚ and therefore‚ it has no previous investments. Also‚ ABC has no other investments planned or contemplated other than the one described in this problem. For an investment of $I today‚ the expected cash flow to ABC in one year is $140‚000. This cash flow is the profit on the investment‚ plus salvage‚ net of taxes and commissions‚ etc. The internal rate of return on the project is 40%. Currently‚ ABC has no debt in its financial structure and its book equity is zero. Book
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Remember that these are changes in percentage of sales‚ not in absolute amount. 3. Look at Exhibit A (page 3 of these case questions). Why is Home Depot ’s cash flow from operations negative? Where has Home Depot been getting the money to finance acquisition of stores? What would happen to Home Depot if the cash flows for operating‚ investing‚ and financing activities for fiscal 1986 (year ending February 1987) were to be exactly the same as for fiscal 1985? 4. Go back to page 16 and compute
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