Given the following Year 12 Financial Statement data for a footwear company: Inc
ID: 402992 • Letter: G
Question
Given the following Year 12 Financial Statement data for a footwear company:
Income Statement Data
Year 12 (in 000s)
Net Revenues from Footwear Sales $ 300,000
Operating Profit (Loss) 75,000
Net Profit (Loss) $ 45,500
Balance Sheet Data
Cash on Hand 10,000
Total Current Assets $ 70,000
Total Assets 320,000
Overdraft Loan Payable 5,000
1-Year Bank Loan Payable 12,000
Current Portion of Long-term Loans 20,000
Total Current Liabilities 58,500
Long-Term Bank Loans Outstanding 100,000
Shareholder Equity: Year 11 Balance Year 12 Change
Common Stock 10,000 0 10,000
Additional Capital 101,000 0 101,000
Retained Earnings 30,000 20,500 50,500
Total Shareholder Equity 141,000 +20,500 161,500
Other Financial Data
Depreciation $12,500
Dividend payments $25,000
Based on the above figures and the formula for calculating the default-risk ratio found on the Help screen for p. 5 of the Footwear Industry Report and p. 28 of the Player%u2019s Guide, the company%u2019s default-risk ratio in Year 12 was
A. 1.65.
B. 0.89.
C. 0.77.
D. 1.03.
E. None of these.
Explanation / Answer
111
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