Step by Step Assistance

Tuesday, 10 September 2013

Some recent financial statements for Smolira Golf, Inc., follow. SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2009 and 2010 2009 2010 2009 2010 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 3,061 $ 3,057 Accounts payable $ 2,178 $ 2,650 Accounts receivable 4,742 5,731 Notes payable 1,775 2,166 Inventory 12,578 13,732 Other 95 112 Total $ 20,381 $ 22,520 Total $ 4,048 $ 4,928 Long-term debt $ 12,900 $ 15,660 Owners’ equity Common stock and paid-in surplus $ 40,500 $ 40,500 Fixed assets Accumulated retained earnings 15,679 39,477 Net plant and equipment 52,746 78,045 Total $ 56,179 $ 79,977 Total assets $ 73,127 $ 100,565 Total liabilities and owners’ equity $ 73,127 $ 100,565 SMOLIRA GOLF, INC. 2010 Income Statement Sales $ 188,370 Cost of goods sold 126,703 Depreciation 5,283 EBIT $ 56,384 Interest paid 1,380 Taxable income $ 55,004 Taxes 19,251 Net income $ 35,753 Dividends $ 11,955 Retained earnings 23,798 Required: Construct the Du Pont identity for Smolira Golf. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).) Profit margin % Total asset turnover Equity multiplier Return on equity %

Some recent financial statements for Smolira Golf, Inc., follow.

SMOLIRA GOLF, INC.
Balance Sheets as of December 31, 2009 and 2010
    2009   2010       2009   2010
Assets   Liabilities and Owners’ Equity
  Current assets           Current liabilities        
     Cash $ 3,061 $ 3,057      Accounts payable $ 2,178 $ 2,650  
     Accounts receivable   4,742   5,731      Notes payable   1,775   2,166  
     Inventory   12,578   13,732      Other   95   112  
 



   



        Total $ 20,381 $ 22,520         Total $ 4,048 $ 4,928  
 



   



            Long-term debt $ 12,900 $ 15,660  
            Owners’ equity        
               Common stock        
                  and paid-in surplus $ 40,500 $ 40,500  
  Fixed assets              Accumulated retained earnings   15,679   39,477  
             



      Net plant and equipment   52,746   78,045          Total $ 56,179 $ 79,977  
 



   



  Total assets $ 73,127 $ 100,565   Total liabilities and owners’ equity $ 73,127 $ 100,565  
 







   









SMOLIRA GOLF, INC.
2010 Income Statement
  Sales     $ 188,370  
  Cost of goods sold       126,703  
  Depreciation       5,283  
     

  EBIT     $ 56,384  
  Interest paid       1,380  
      

  Taxable income     $ 55,004  
  Taxes       19,251  
      

  Net income     $ 35,753  
      



     Dividends $ 11,955      
     Retained earnings   23,798      


Required:
Construct the Du Pont identity for Smolira Golf. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).)
 
  Profit margin  %
  Total asset turnover  
  Equity multiplier  
  Return on equity  %

The most recent financial statements for Shinoda Manufacturing Co. are shown below: Income Statement Balance Sheet Sales $ 64,500 Current assets $ 29,500 Debt $ 45,700 Costs 44,530 Fixed assets 82,400 Equity 66,200 Taxable income $ 19,970 Total $ 111,900 Total $ 111,900 Tax (30%) 5,991 Net Income $ 13,979 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 46 percent dividend payout ratio. No external financing is possible. Required: What is the sustainable growth rate? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).) Sustainable growth rate %

The most recent financial statements for Shinoda Manufacturing Co. are shown below:  
Income Statement Balance Sheet
  Sales $ 64,500   Current assets $ 29,500   Debt $ 45,700  
  Costs   44,530   Fixed assets   82,400   Equity   66,200  
 

 

 

  Taxable income $ 19,970      Total $ 111,900      Total $ 111,900  
       



 



  Tax (30%)   5,991            
 

           
  Net Income $ 13,979            
 



           

 
Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 46 percent dividend payout ratio. No external financing is possible.
 
Required:
What is the sustainable growth rate? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)
 
  Sustainable growth rate   %

The most recent financial statements for Shinoda Manufacturing Co. are shown below: Income Statement Balance Sheet Sales $ 64,600 Current assets $ 30,000 Debt $ 46,200 Costs 44,480 Fixed assets 82,900 Equity 66,700 Taxable income $ 20,120 Total $ 112,900 Total $ 112,900 Tax (35%) 7,042 Net Income $ 13,078 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 47 percent dividend payout ratio. No external financing is possible. Required: What is the internal growth rate? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).) Internal growth rate %

The most recent financial statements for Shinoda Manufacturing Co. are shown below:  
Income Statement Balance Sheet
  Sales $ 64,600     Current assets $ 30,000     Debt $ 46,200  
  Costs   44,480     Fixed assets   82,900     Equity   66,700  
 

 

 

  Taxable income $ 20,120        Total $ 112,900        Total $ 112,900  
       



 



  Tax (35%)   7,042              
 

           
  Net Income $ 13,078              
 



           

 
Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 47 percent dividend payout ratio. No external financing is possible.
 
Required:
What is the internal growth rate? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)
 
  Internal growth rate  %

The Delson Company has an ROA of 8.6 percent, a 9.00 percent profit margin, and an ROE of 15.00 percent. Requirement 1: What is the company’s total asset turnover? (Round your answer to 2 decimal places (e.g., 32.16).) Total asset turnover times Requirement 2: What is the equity multiplier? (Round your answer to 2 decimal places (e.g., 32.16).) Equity multiplier times

The Delson Company has an ROA of 8.6 percent, a 9.00 percent profit margin, and an ROE of 15.00 percent.  
Requirement 1:
What is the company’s total asset turnover? (Round your answer to 2 decimal places (e.g., 32.16).)
 
  Total asset turnover  times
 
Requirement 2:
What is the equity multiplier? (Round your answer to 2 decimal places (e.g., 32.16).)
 
  Equity multiplier  times

Bethesda Mining Company reports the following balance sheet information for 2009 and 2010. BETHESDA MINING COMPANY Balance Sheets as of December 31, 2009 and 2010 2009 2010 2009 2010 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 65,470 $ 82,487 Accounts payable $ 186,922 $ 194,611 Accounts receivable 65,281 85,639 Notes payable 82,020 133,588 Inventory 116,676 181,549 Total $ 268,942 $ 328,199 Total $ 247,427 $ 349,675 Long-term debt 231,000 167,750 Owners’ equity Common stock and paid-in surplus $ 224,000 $ 224,000 Accumulated retained earnings 182,232 219,704 Fixed assets Net plant and equipment $ 658,747 $ 589,978 Total $ 406,232 $ 443,704 Total assets $ 906,174 $ 939,653 Total liabilities and owners’ equity $ 906,174 $ 939,653 Suppose that the Bethesda Mining Company had sales of $2,316,873 and net income of $93,381 for the year ending December 31, 2010. Required: Calculate ROE using the Du Pont identity. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).) Profit margin % Total asset turnover Equity multiplier Return on equity %

Bethesda Mining Company reports the following balance sheet information for 2009 and 2010.  
BETHESDA MINING COMPANY
Balance Sheets as of December 31, 2009 and 2010
    2009     2010       2009     2010  
 Assets             Liabilities and Owners’ Equity            
  Current assets                 Current liabilities            
    Cash $ 65,470   $ 82,487        Accounts payable $ 186,922   $ 194,611  
    Accounts receivable   65,281     85,639        Notes payable   82,020     133,588  
    Inventory   116,676     181,549    





  





         Total $ 268,942   $ 328,199  
      Total $ 247,427   $ 349,675    





 





  Long-term debt   231,000     167,750  
                Owners’ equity            
                   Common stock and paid-in surplus $ 224,000   $ 224,000  
                   Accumulated retained earnings   182,232     219,704  
  Fixed assets               





    Net plant and equipment $ 658,747   $ 589,978              Total $ 406,232   $ 443,704  
 





           





  Total assets $ 906,174   $ 939,653     Total liabilities and owners’ equity $ 906,174   $ 939,653  
 











 









 


Suppose that the Bethesda Mining Company had sales of $2,316,873 and net income of $93,381 for the year ending December 31, 2010.
 
Required:
Calculate ROE using the Du Pont identity. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).)
 
  Profit margin  %
  Total asset turnover  
  Equity multiplier  
  Return on equity  %

Bethesda Mining Company reports the following balance sheet information for 2009 and 2010. Required: Prepare the 2009 and 2010 common-size balance sheets for Bethesda Mining. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).) BETHESDA MINING COMPANY Balance Sheets as of December 31, 2009 and 2010 2009 2010 2009 2010 Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 40,010 % $ 51,181 % Accounts payable $ 191,922 % $ 199,611 % Accounts receivable 60,281 % 80,639 % Notes payable 87,020 % 138,588 % Inventory 128,441 % 194,689 % Total $ 278,942 % $ 338,199 % Total $ 228,732 % $ 326,509 % Long-term debt 241,000 % 177,750 % Owners’ equity Common stock and paid-in surplus $ 214,000 % $ 214,000 % Accumulated retained earnings 152,537 % 186,038 % Fixed assets Net plant and equipment $ 657,747 % $ 589,478 % Total $ 366,537 % $ 400,038 % Total assets $ 886,479 % $ 915,987 % Total liabilities and owners’ equity $ 886,479 % $ 915,987 %

Bethesda Mining Company reports the following balance sheet information for 2009 and 2010.
 
Required:
Prepare the 2009 and 2010 common-size balance sheets for Bethesda Mining. (Do not include the percent signs (%). Round your answers to 2 decimal places (e.g., 32.16).)
 
BETHESDA MINING COMPANY
Balance Sheets as of December 31, 2009 and 2010
  2009 2010   2009 2010
 Assets                     Liabilities and Owners’  Equity                    
  Current assets                         Current liabilities                    
    Cash $ 40,010     % $ 51,181     %      Accounts payable $ 191,922   % $ 199,611   %
    Accounts receivable   60,281     %   80,639     %      Notes payable   87,020   %   138,588   %
    Inventory   128,441     %   194,689     %  









  









         Total $ 278,942   % $ 338,199   %
      Total $ 228,732     % $ 326,509     %  









 









  Long-term debt   241,000   %   177,750   %
                        Owners’ equity                    
                           Common stock and paid-in surplus $ 214,000   % $ 214,000   %
                           Accumulated retained earnings   152,537   %   186,038   %
  Fixed assets                       









    Net plant and equipment $ 657,747     % $ 589,478     %            Total $ 366,537   % $ 400,038   %
 









           









  Total assets $ 886,479     % $ 915,987     %   Total liabilities and owners’ equity $ 886,479   % $ 915,987   %