Preview File Edit View Go Tools Window Help 92%) Sun 2:41 PM E THPS 2 - Fall 201

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Preview File Edit View Go Tools Window Help 92%) Sun 2:41 PM E THPS 2 - Fall 2018 (1).pdf (page 4 of 9) Q Search THPS 2 Fall 2018 (1).pdf USE THE DATA IN THE TABLE BELOW TO ANSWER QUESTIONS 19-24 (Assume all account figures are in dollars) 016 700 1,930 80 2017 640 2,260 140 FT 3300-CORPORATION FINANCE Accounts payable Accounts receivable, net Accruals Cash Capital surplus Common stock Cost of goods sold Depreciation expense Interest expense Inventory (end of year) Long-term debt Net fixed assets Net sales Notes payable Operating expenses (excluding depreciation) Retained earnings Taxes 1,270 980 7,260 1,600 250 4,860 6,210 8,530 12,750 820 2,130 8,210 350 1,390 1,200 7,630 1,730 180 5,240 6,390 9,210 13,950 760 2,530 8,430 410 19. This company's operating profit margin (as a percent rounded to 1 decimal place) in 2016 was_ 20. The total asset tumover ratio for this company in 2017- 21, ROE for 2017is %. 22. Cash flow from operating activities in 2017 is $ 23. Cash flow from investing activities in 2017 is S_. 24. Cash flow from financing activities in 2017 is $ 23 XM

Explanation / Answer

19. Operating profit margin in 2016 = Net operating margin/Net sales = $1760/$12750 = 13.8%

20. Total asset turnover ratio in 2017 = Net sales/Average total assets = $13950/$18610 = 0.75

Average total assets = ($18270 + $18950)/2 = $37220/2 = $18610

21. ROE for 2017 = Net income/Average stockholders' equity = $1470/$10740 = 13.7%

Average stockholders' equity = ($10460 + $11020)/2 = $21480/2 = $10740

22. Cash flow from operating activities in 2017: $2490

23. Cash flow from investing activities in 2017: $-2410

24. Cash flow from financing activities in 2017: $-790

Note: Ratios are rounded off to 1 decimal place.

Working:

Income Statement 2016 2017 Net sales 12750 13950 Cost of goods sold 7260 7630 Gross margin 5490 6320 Operating expenses 2130 2530 Depreciation expense 1600 1730 Total expenses 3730 4260 Net operating margin $ 1760 2060 Interest expense 250 180 Income before taxes 1510 1880 Taxes 350 410 Net income $ 1160 1470

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