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Always Use 2 Decimal Places (When % As Percent - Not As Fractions) and Provide Detail of The Calculations Made

The document provides instructions for a study guide that involves forecasting financial statements, researching and explaining financial ratios, and performing calculations related to working capital, interest rates, and factoring. It includes forecasting an income statement and specific balance sheet accounts for Distribuidora Avícola Zacatecas in 2012. It also tasks the student with researching definitions of various ratios from Investopedia and explaining differences, calculating DuPont analysis ratios, compounding an interest rate, explaining the difference between recourse and non-recourse factoring, and calculating working capital needs and available amounts.

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160 views2 pages

Always Use 2 Decimal Places (When % As Percent - Not As Fractions) and Provide Detail of The Calculations Made

The document provides instructions for a study guide that involves forecasting financial statements, researching and explaining financial ratios, and performing calculations related to working capital, interest rates, and factoring. It includes forecasting an income statement and specific balance sheet accounts for Distribuidora Avícola Zacatecas in 2012. It also tasks the student with researching definitions of various ratios from Investopedia and explaining differences, calculating DuPont analysis ratios, compounding an interest rate, explaining the difference between recourse and non-recourse factoring, and calculating working capital needs and available amounts.

Uploaded by

KirtiKishan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Study guide Distribuidora Avícola Zacatecas

Always use 2 decimal places (when % as percent –not as fractions)


and provide detail of the calculations made

1- Using figures from Distribuidora Avícola Zacatecas , forcast the Income Statement for 2012.
Assuming:

a. Sales growth of 10%


b. Cost of goods sold 65% (over sales)
c. Of the 2011 operating expenses,
i. 2,000 are fixed (with an inflation rate of 3%) and
ii. the remaining are variable with the sales level
d. Total interest expenses $900,000
e. The tax rate and the dividend payout ratio will have no changes over 2011

Forcast the balance for: (I´m not asking for the complete statement, only these 4 accounts)

f. Accounts receivable on Dec 31st, 2012 if DSO= 35 days of sales


g. Inventories on Dec 31st, 2012 if DSI= 35 days of Cost of goods sold
h. Accounts payable on Dec 31st, 2012 2 if DPO= 12 days of sales
i. Retained Earnings on the Dec 31st, 2012 Balance Sheet

2- Search on www.investopedia.com the DEFINITION (WHAT IS …..) of


• ROE (http://www.investopedia.com/terms/r/returnonequity.asp )
• ROA (http://www.investopedia.com/terms/r/returnonassets.asp)
• ROI(http://www.investopedia.com/terms/r/returnoninvestment.asp )
• RONA (http://www.investopedia.com/terms/r/rona.asp )

Based on the formula shown by Investopedia, Explain the differences between these four
profitability Ratios

3- Search on www.investopedia.com the DEFINITION of


• Cash conversion cycle (http://www.investopedia.com/terms/c/cashconversioncycle.asp )
• Days sales of inventory (http://www.investopedia.com/terms/d/dsi.asp )
• Inventory turnover (in the previous one or in
http://www.investopedia.com/terms/i/inventoryturnover.asp )

Based on the formula shown by Investopedia, Explain the differences between the last two
efficiency ratios
4- Search on www.investopedia.com the DEFINITION of:

• Days Sales Outstanding (http://www.investopedia.com/terms/d/dso.asp)

Explain the differences between the Investopedia formula and the one we have been using.

• If you want to judge the performance of the Sales Director of the company using this ratio,
which formula is “more appropriate”? Why?
• If you want to judge the performance of the Accounts Receivable manager of the company
using this ratio, which formula is “more appropriate”?

5- The DuPont formula, helps to understand where the ROE comes from; calculate the
ROE, ROS, AT and EM for Distribuidora Avícola Zacatecas on 2008 and 2011. What
can you infer from these 4 ratios?

6- On http://www.investopedia.com/terms/1/1-10net30.asp, is stated that the cost of 1%/10


net 30 is 18.2%. This statement is not considering that you should compound the
interest rate and the real yearly cost of these terms is 19.83% (using a “360 days year”).
Search the formula for compound interest and calculate the yearly cost of 2%/12, net 45.

7- Explain the difference between a recourse and a non-recourse factoring

http://www.rtsfinancial.com/guides/difference-between-recourse-and-non-recourse-factoring

8- Assuming that Working Capital NEEDS, come from Accounts receivable (including
factoring), Inventories and 12 days of purchases on accounts payable to suppliers;
calculate the Working Capital Needs on Dec 31st of 2008 and 2011. USE ACTUAL data
for Cash, Accounts receivable and inventories and desired data for Accounts payable

9- Assuming that the Working Capital comes from

Equity + Long term debt - Net fixed Assets

Calculate the Working Capital on Dec 31st of 2008 and 2011

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