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FIN 370 Week 1 Questions and Problem Set (Solutions)

Purpose of Assignment Provide students with a basic understanding of financial management, goal of the firm, and the basic financial statements. Students should be able to calculate and analyze solvency, liquidity, profitability and market value ratios, and create proforma financial statements. Assignment Steps Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web that offer support for office products.

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KyleWalkeer
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363 views3 pages

FIN 370 Week 1 Questions and Problem Set (Solutions)

Purpose of Assignment Provide students with a basic understanding of financial management, goal of the firm, and the basic financial statements. Students should be able to calculate and analyze solvency, liquidity, profitability and market value ratios, and create proforma financial statements. Assignment Steps Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web that offer support for office products.

Uploaded by

KyleWalkeer
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Purpose of Assignment

Provide students with a basic understanding of financial management, goal of the firm, and

the basic financial statements. Students should be able to calculate and analyze solvency,

liquidity, profitability and market value ratios, and create proforma financial statements.

Assignment Steps

Resources: Tutorial help on Excel and Word functions can be found on the Microsoft

Office website. There are also additional tutorials via the web that offer support for office

products.

Complete the following Questions and Problems (Concepts and Critical Thinking Questions

for Ch. 1 Only) from each chapter as indicated.

Show all work and analysis.

Prepare in Microsoft Excel or Word.

Ch. 1: Questions 3 & 11 (Concepts Review and Critical Thinking Questions section)

3. Corporations What is the primary disadvantage of the corporate form of organization?

Name at least two advantages of corporate organization.

11. Goal of the Firm Evaluate the following statement: Managers should not focus on the

current stock value because doing so will lead to an overemphasis on short-term profits at

the expense of long-term profits.


Ch. 2: Questions 4 & 9 (Questions and Problems section): Microsoft Excel template

provided for Problem 4.

4. Per-Share Earnings and Dividends Suppose the firm in Problem 3 had 90,000 shares

of common stock outstanding. What is the earnings per share, or EPS, figure? What is the

dividends per share figure?

9. Calculating Additions to NWC The 2014 balance sheet of Steelo, Inc., showed current

assets of $4,630 and current liabilities of $2,190. The 2015 balance sheet showed current

assets of $5,180 and current liabilities of $2,830. What was the companys 2015 change in

net working capital, or NWC?

Ch. 3: Questions 4 & 7 (Question and Problems section)

4. Calculating Inventory Turnover The Green Corporation has ending inventory of

$417,381, and cost of goods sold for the year just ended was $4,682,715. What is the

inventory turnover? The days sales in inventory? How long on average did a unit of

inventory sit on the shelf before it was sold?

7. DuPont Identity If Roten Rooters, Inc., has an equity multiplier of 1.15, total asset

turnover of 2.10, and a profit margin of 6.1 percent, what is its ROE?

Ch. 4: Questions 1 & 6 (Questions and Problems section): Microsoft Excel template

provided for Problem 6.

1. Pro Forma Statements Consider the following simplified financial statements for the

Yoo Corporation (assuming no income taxes):

The company has predicted a sales increase of 15 percent. It has predicted that every item

on the balance sheet will increase by 15 percent as well. Create the pro forma statements

and reconcile them. What is the plug variable here?


6. Calculating Internal Growth The most recent financial statements for Schenkel Co. are

shown here:

Assets and costs are proportional to sales. Debt and equity are not. The company maintains

a constant 30 percent dividend payout ratio. What is the internal growth rate?concile them.

What is the plug variable here?

Format your assignment consistent with APA guidelines if submitting in Microsoft Word.

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