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Assignment L

The document provides financial information for FCF Co., including income statements for 2020 and balance sheets as of December 31, 2020. It also includes ratios comparing FCF Co.'s performance to industry averages and calculations of financial metrics like net income, retained earnings, and current/total assets and liabilities.

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37 views6 pages

Assignment L

The document provides financial information for FCF Co., including income statements for 2020 and balance sheets as of December 31, 2020. It also includes ratios comparing FCF Co.'s performance to industry averages and calculations of financial metrics like net income, retained earnings, and current/total assets and liabilities.

Uploaded by

phprcffj2r
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Tarek abdelrahman kamel

202001481
FCF Co. Provides the following
Sales revenue 700,000,000
information:
Less: Cost of Goods Sold 490,000,000
Income Statement
Gross operating income (GOI) 210,000,000
1 / 1 / 2020 – 31 /12 /2020
Less: depreciation 40,000,000
Less: other operating expenses 42,000,000
Net operating income (NOI) 128,000,000
Other revenues 4,000,000
Less: other expenses 8,000,000
EBIT 124,000,000
Less: interest 12,600,000
EBT 111,400,000
Less: taxes 33,420,000
NIAT (NPAT) 77,980,000
Preferred dividends 12,600,000
Common stock dividends 50,000,000
Retained earnings 15,380,000
FCF Co Balance Sheet
As in 31 / 12 / 2020

Cash 30,000,000 Accounts payable 90,000,000


Marketable securities 10,000,000 Accrued compensations 10,000,000
Accounts receivable 230,000,000 Accrued taxes 40,000,000
Inventories 115,000,000 Accrued interest 10,000,000
Notes receivables 5,000,000 Other current liabilities 20,000,000
Other current assets 10,000,000 Total current liabilities 170,000,000
Total current assets 400,000,000 Bonds 80,000,000
Land and buildings 100,000,000 Long term bank loans 20,000,000
Machineries and equipment 450,000,000 Total long-term liabilities 100,000,000
Total property, plant, and
550,000,000 Total liabilities 270,000,000
equipment
Less: accumulated depreciation 180,000,000 Preferred stocks capital 90,000,000
Net property, plant, and equipment 370,000,000 Common stock capital 400,000,000
Good well 130,000,000 Retained earnings 190,000,000
Patents 50,000,000 Total common equity capital 590,000,000
Total intangible assets 180,000,000 Total equity 680,000,000
Total noncurrent assets 550,000,000
Total assets 950,000,000 Total liabilities and equity 950,000,000

Other information

Year 360 days


40,000,000
Number of common stocks
shares
Price per share $100
Annual purchase $450,000,000
Ratio FCF Co. Industry Comment
Current Ratio = Current Assets / Current Liabilities
Current Assets = $400,000,000
Current ratio 2.35 2
Current Liabilities = $170,000,000
Current Ratio = $400,000,000 / $170,000,000 = 2.35

Quick Ratio = (Current Assets - Inventories) / Current


Liabilities
Current Assets = $400,000,000
1.47 Inventories = $115,000,000
Quick ratio 1.8
Current Liabilities = $170,000,000
Quick Ratio = ($400,000,000 - $115,000,000) /
$170,000,000 = 1.47

Total Assets Turnover = Sales Revenue / Total Assets


Sales Revenue = $700,000,000
Total Assets = $950,000,000
total assets turn over 0.736 0.9
Total Assets Turnover =$700,000,000/$950,000,000 =
0.736

Average Collection Period = (Accounts Receivable / Annual


Sales) * Number of Days in Year
Accounts Receivable = $230,000,000
Average collection
118.29 119 Annual Sales = $700,000,000
period
Number of Days in Year = 360
Average Collection Period =($230,000,000/$700,000,000) *
360 = 118.29 days
Inventory Turnover = Cost of Goods Sold / Average
Inventory
Inventory turnover 8.52 5.5
Cost of Goods Sold = $490,000,000
Average Inventory = ($115,000,000 + $0) / 2
Inventory Turnover = $490,000,000 / $57,500,000 = 8.52

Average inventory age 42.89 65.45 Average Inventory Age = (365 days / Inventory Turnover)
Average Inventory Age = 365 / 8.52 = 42.89 days

Average Payment Ratio = (Accounts Payable / Cost of


Goods Sold) * Number of Days in Year
Accounts Payable = $90,000,000
Average payment ratio 66.12 91.8
Cost of Goods Sold = $490,000,000
Number of Days in Year = 360
Average Payment Ratio = ($90,000,000 / $490,000,000) *
360 = 66.12 days

Debt Ratio = (Total Liabilities / Total Assets) * 100


Total Liabilities = $270,000,000
Total Assets = $950,000,000
debt ratio 28.42% 40%
Debt Ratio = ($270,000,000 / $950,000,000) * 100 =
28.42%

Debt to Equity Ratio = (Total Liabilities / Total Common


Equity Capital)
Total Liabilities = $270,000,000
debt to equity 45.67% 65% Total Common Equity Capital = $590,000,000
Debt to Equity Ratio = $270,000,000 / $590,000,000 =
Complete the following table:

1. Modern Furniture Corporation has sales of $8,000,000, net income of $750,000, total assets
of $2,500,000, and 150,000 shares of common stock outstanding. If Modern Furniture P/E
ratio is 15, what is the company's current stock price?

EPS = Net Income / Number of Common Shares Outstanding


EPS = $750,000 / 150,000 shares = $5 per share
P/E Ratio = Stock Price / EPS
15 = Stock Price / $5
Stock Price = 15 * $5 = $75
Current stock price Modern Furniture Corporation is 75$

2. XYZ Co. has a debt ratio of 0.45, noncurrent liabilities of $60,000 and total assets of
$180,000. What are XYZ current liabilities and FLM?
Total Liabilities = Debt Ratio * Total Assets
Total Liabilities = 0.45 * $180,000 = $81,000
Current Liabilities = Total Liabilities - Noncurrent Liabilities
Current Liabilities = $81,000 - $60,000 = $21,000

3. Alexandria Oil has a net profit margin of 8.0%, a total asset turnover of 3, total assets of
$950 million, and a book value of equity of $600 million. What is Alexandria Oil return-on-
assets (ROA)?
ROA = 0.08 * 3

ROA = 0.24

4. Hi Sky has total assets of $6.5 million, a debt ratio of 50%, and a profit margin of 12% and
sales of $9 million. What is Hi Sky return on equity (ROE)?
ROE = (Net Profit Margin) * (Total Asset Turnover) * (Equity Multiplier)
Equity Multiplier = 1 / (1 - Debt Ratio)
Equity Multiplier = 1 / (1 - 0.50) = 2
ROE = (0.12) * [(Sales / Total Assets)] * (Equity Multiplier)
ROE = (0.12) * [($9,000,000 / $6,500,000)] * 2
ROE = (0.12) * (1.3846) * 2
ROE ≈ 0.3323

5. If net income was $17,000, interest expense was $6,000, and taxes were $1,000, what is the
operating profit margin if sales were $80,000?

Operating Profit = Net Income - Interest Expense - Taxes


Operating Profit = $17,000 - $6,000 - $1,000 = $10,000
Operating Profit Margin = (Operating Profit / Sales) * 100
Operating Profit Margin = ($10,000 / $80,000) * 100
Operating Profit Margin = (0.125) * 100
Operating Profit Margin = 12.5%

6. Find average collection period if a firm has an accounts receivable of $200,000, a total asset
turnover of 1.0, and total assets of $750,000.
Total Sales = 1.0 * $750,000 = $750,000
Average Collection Period = (Accounts Receivable / Total Sales) * Number of Days in the
Period
Average Collection Period = ($200,000 / $750,000) * 360 days
Average Collection Period = (0.2667) * 360
Average Collection Period ≈ 96 days

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