What is the book value of klingon total assets today

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Q1. What are the three types of financial management decisions? For each type of decision, give an example of a business transaction that would be relevant?

Q2. What are the four primary disadvantages of the sole proprietorship and partnership forms of business organization? What benefits are there to these types of business organization as opposed to the corporate form?

Q3. Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6 million. The machinery can be sold to the Romulans today for $5.3 million. Klingon's current balance sheet shows net fixed assets of $3.2 million, current liabilities of $900,000, and net working capital of $215,000. If all the current assets were liquidated today, the company would receive $1.25 million cash.

a) What is the book value of Klingon's total assets today?

b) What is the market value?

Q4. The Anberlin Co. had $255,000 in 2011 taxable income. Using the tax rates given in Table below,

a) Calculate the company's 2011 income taxes.

b) What is the average tax rate?

c) What is the marginal tax rate?

Table

Taxable Income Tax Rate

$ 0 - 50,000 15%

$ 50,001 - 75,000 25%

$ 75,001 - 100,000 34%

$ 100,001 - 335,000 39%

$ 335,001 - 10,000,000 34%

$ 10,000,001 - 15,000,000 35%

$ 15,000,001 - 18,333,333 38%

$ 18,333,3334 + 35%

Q5. Jetson Spacecraft Corp. shows the following information on its 2011 income statement:

Sales = $235,000

Costs of goods sold = $141,000

Other expenses = $7,900

Depreciation expense = $17,300

Interest expense = $12,900

Taxes = $19,565

Dividends = $12,300

In addition, you are told that the firm issued $6,100 in new equity during 2011 and redeemed $4,500 in outstanding long-term debt.

a) What is the 2011 operating cash flow?

b) What is the 2011 cash flow to creditors?

c) What is the 2011 cash flow to stockholders?

d) If net fixed assets increased by $25,000 during the year, what was the addition to Net Working Capital (NWC)?

Q6. Prepare a 2011 balance sheet for Cornell Corp. based on the following information:

Cash = $127,000

Patents and copyrights = $630,000

Accounts payable = $210,000

Accounts receivable = $105,000

Tangible net fixed assets = $1,620,000

Inventory = $293,000

Notes payable = $160,000

Accumulated retained earnings = $1,278,000

Long-term debt = $845,000

Q7. Perry, Inc., has a total debt ratio of 0.46.

a) What is its debt-equity ratio?

b) What is its equity multiplier?

Total debt ratio = 0.46 = TD / TA

Q8. Isolation Company has a debt-equity ratio of 0.80. Return on assets is 7.9% and total equity is $480,000.

a) What is the equity multiplier?

b) What is the return on equity?

c) Calculate net income.

Q9. You have been hired as an analyst for Mellon Bank and your team is working on an independent assessment of Daffy Duck Food Inc. (DDF Inc.) DDF Inc. is a firm that specializes in the production of freshly imported farm products from France. Your assistant has provided you with the following data for Flipper Inc and their industry.

Ratio

2009

2008

2007

2009-

Industry

Average

Long-term debt 0.45 0.40 0.35 0.35

Inventory Turnover 62.65 42.42 32.25 53.25

Depreciation/Total Assets 0.25 0.014 0.018 0.015

Days' sales in receivables 113 98 94 130.25

Debt to Equity 0.75 0.85 0.90 0.88

Profit Margin 0.082 0.07 0.06 0.075

Total Asset Turnover 0.54 0.65 0.70 0.40

Quick Ratio 1.028 1.03 1.029 1.031

Current Ratio 1.33 1.21 1.15 1.25

Times Interest Earned 0.9 4.375 4.45 4.65

Equity Multiplier 1.75 1.85 1.90 1.88

a) In the annual report to the shareholders, the CEO of Flipper Inc wrote, "1997 was a good year for the firm with respect to our ability to meet our short-term obligations. We had higher liquidity largely due to an increase in highly liquid current assets (cash, account receivables and short-term marketable securities)." Is the CEO correct? Explain and use only relevant information in your analysis.

b) What can you say about the firm's asset management? Be as complete as possible given the above information, but do not use any irrelevant information.

c) You are asked to provide the shareholders with an assessment of the firm's solvency and leverage.

Be as complete as possible given the above information, but do not use any irrelevant information.

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Reference no: EM131387342

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