Exam 4: Financial Statement Analysis and Forecasting

The only debt a firm has outstanding is a $10 million,8 percent bond issue.If their earnings before taxes are $5.2 million,then their times-interest-earned ratio would be:

Net working capital represents:

Which of the following is true at the sustainable growth rate?

A firm has $1,750,000 of total assets and $1,330,000 of total liabilities.The firm then issues 10,000 newly created shares at a price of $17 each (prior to the share issuance the firm had 35,000 shares outstanding).What is the firm's equity book value per share (BVPS)after the share issuance?

In 2015,Voyage Company had earnings per share of $45 and paid a dividend of $15 per share.The dividend yield was 8%.The book value per share is $100.The price-earnings (P/E)ratio was:

Zhang has observed that the sales of XYU Company have increased by 5% every year for the past 5 years.Zhang also found that the average collection period has increased over time while the average day's sales in inventory has decreased over the same period.Based on this information,what should Zhang conclude about XYU Company?

Marie invested $3 million in 10-year bonds of Abitibi Mills Company nine years ago.Recent changes in the industry have Marie worried about whether she will receive her principal at the end of next year.Which ratio(s)will most directly address Marie's concern?

EXLO Company has current sales of $100,000 and has projected annual sales growth of 5%,asset growth of 120%,profit margins of 3%,and its dividend policy is to have a dividend payout of 15% per year.Assume there are no spontaneous liabilities.The sustainable growth rate for EXLO is closest to:

Which one of the following is FALSE?

Identify three potential users of financial ratios,and explain the user's focus.

When is a productivity ratio less important to analyze?

Why are leverage ratios important?

What is the difference between the P/E ratio and the forward P/E ratio?

EXLO Company has current sales of $100,000 and projected annual sales growth of 5%,profit margins of 3%,and its dividend policy is to have a dividend payout of 15% per year.The forecasted retained earnings for next year are:

What does the contribution margin measure?

Which of the following are not components in the DuPont analysis?

Ratios should not be used to compare two companies in different industries since wide variations across industries can occur.But even within an industry,sometimes comparisons can be problematic.Which of the following is/are a reason(s)for concern?

GoHabs Firm has assets and liabilities with book values of $65 million and $35 million,respectively.The market value of the assets is $75 million and the market value of the debt is $40 million.If GoHabs's EBITDA is $20 million,what is the EBITDA multiple?

Montreal Brewing Company has an outstanding debt of $20 million.10 percent of the company debt bears an interest cost of 8 percent and the rest costs 6 percent.If their earnings before taxes are $5.2 million,then their times-interest-earned ratio would be:

In 2015,Inglis Arctic Sports (IAS)had total sales of $35 million.The firm earned $3.00 per share and paid dividends of $1.00 per share.There are 1 million shares currently outstanding.The 2015 year-end balance sheet is shown below: Inglis Arctic Sports Consolidated Balance Sheet (at year end in thousands of dollars) You are a financial analyst with IAS and have been asked to prepare a financial plan for next year.You have been given the following information and projections for 2016 from the marketing and production departments: •Sales are projected to grow by 15 percent in 2016. •New capital expenditures will be $3.75 million for the replacement of a production line. •Depreciation expense of $1,200,000 will be recorded in 2016. •The new more efficient production line is expected to result in an inventory increase of only 7.5 percent from 2015 levels. •Management would like to achieve a total debt-to-equity ratio of 1.0 in 2016,while keeping long-term debt unchanged from 2015. •Management expects the net profit margin and dividend payout ratios to remain the same as in 2015. Forecast the 2016 balance sheet for IAS.