Cañada College Finance Balance Sheet and Income Statement Questions
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#1: Company A is a financial service firm. It has the following Balance Sheet and Income Statement as of 12/31/2012.
1). Calculate ROE
A). 18%
B). 19%
C). 20%
D). 21%
E). 22%
2). Calculate ROA
A). 2.3%
B). 3.3%
C). 4.3%
D). 5.3%
E). 6.3%
3). What was the firms tax rate?
A). 34%
B). 36%
C). 38%
D). 40%
E). 42%
#2. Company A is a mid-sized industrial corporation based in Santa Clara County, California. Its audited balance sheet and income statement ending 12/31/2001 are listed below.
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Balance Sheet (in $000) |
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Assets |
Liabilities & Equity |
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Cash |
$ 4,200 |
Accounts Payable |
$ 27,000 |
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Marketable Securities |
$ 5,000 |
Notes Payable (due within 3 months) |
$ 15,000 |
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Accounts Receivable |
$ 49,800 |
Long-term debt |
$ 36,000 |
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Inventory |
$ 40,000 |
Common Stock |
$ 30,000 |
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Fixed Assets |
$ 44,000 |
Additional Paid-in Capital |
$ 5,000 |
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Total Assets |
$ 143,000 |
Retained Earnings |
$ 30,000 |
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Total Liabilities & Equity |
$ 143,000 |
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Income Statement (in $000) |
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Sales |
$ 210,000 |
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Cost of goods sold |
$ 140,000 |
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Gross Margin |
$ 70,000 |
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Selling & Administrative Expenses |
$ 20,000 |
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Depreciation |
$ 9,000 |
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EBIT |
$ 41,000 |
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Interest Expense |
$ 5,000 |
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Earnings before tax |
$ 36,000 |
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Taxes |
$ 11,000 |
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Net Income |
$ 25,000 |
1). Calculate current ratio.
A). 2.1
B). 2.4
C). 2.6
D). 2.8
E). 3.0
2). Calculate fixed-asset turnover ratio.
A). 4.2
B). 4.4
C). 4.6
D). 4.8
E). 5.0
3). Calculate the firms time interest earned.
A). 7.4
B). 7.6
C). 7.8
D). 8.0
E). 8.2
