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Prob 13-2 Use your knowledge of balance sheets to fill in the missing amounts: Cash $ 10,000 Accounts receivable $ 100,000 Inventory Total current assets $ 220,000 Gross plant and equipment $ 500,000 Less: accumulated depreciation Net plant and equipment $ 375,000 Total assets Accounts payable $ 12,000 Notes payable $ 50,000 Total current liabilities Long-term debt Total liabilities $ 190,000 Common stock ($1 par, 100,000 shares) Paid-in capital Retained earnings $ 150,000 Total stockholders’ equity Total liabilities and equity Prob 13-3 Use your knowledge of balance sheets to fill in the missing amounts: Cash $ 50,000 Accounts receivable $ 80,000 Inventory $ 100,000 Total current assets Gross plant and equipment Less: accumulated depreciation $ 130,000 Net plant and equipment $ 600,000 Total assets Accounts payable $ 12,000 Notes payable $ 50,000 Total current liabilities Long-term debt Total liabilities Common stock ($1 par, 100,000 shares) Paid-in capital $ 250,000 Retained earnings $ 200,000 Total stockholders’ equity Total liabilities and equity $ 830,000 LIABILITIES ASSETS ASSETS LIABILITIES Prob 13-4 Use your knowledge of balance sheets and common-size statements to fill in the missing dollar amounts: Cash $ 25,000 3.4% Accounts receivable $ 125,000 Inventory 27.1% Total current assets $ 350,000 Gross plant and equipment 95.0% Less: accumulated depreciation $ 313,000 42.5% Net plant and equipment Total assets $ 737,000 100.0% Accounts payable 15.7% Notes payable $ 29,000 3.9% Total current liabilities Long-term debt $ 248,000 33.6% Total liabilities $ 393,000 Common stock ($.01 par, 450,000 shares) $ 4,500 Paid-in capital $ 220,500 29.9% Retained earnings Total stockholders’ equity $ 344,000 46.7% Total liabilities and equity 100.0% LIABILITIES ASSETS Prob 14-1 The Robinson Company has the following current assets and current liabilities for these two years: 2011 2012 Cash and marketable securities$ 50,000 $ 50,000 Accounts receivable $ 300,000 $ 350,000 Inventories $ 350,000 $ 500,000 Total current assets $ 700,000 $ 900,000 Accounts payable $ 200,000 $ 250,000 Bank loan $ - $ 150,000 Accruals $ 150,000 $ 200,000 Total current liabilities $ 350,000 $ 600,000 a. Compare the current ratios between the two years. 2011 2012 Current ratio Comments: b. Compare the acid-test ratios between 2011 and 2012. Comment on your findings. 2011 2012 Acid-test ratio Comments: Prob 14-5 Following are selected financial data in thousands of dollars for the Hunter Corporation. 2012 2011 Current assets $ 500 $ 400 Fixed assets, net $ 700 $ 600 Total assets $ 1,200 $ 1,000 Current liabilities $ 300 $ 200 Long-term debt $ 200 $ 200 Common equity $ 700 $ 600 Total liabilities and equity $ 1,200 $ 1,000 Net sales $ 1,500 $ 1,200 Total expenses $ 1,390 $ 1,100 Net income $ 110 $ 100 a. Calculate Hunter’s rate of return on total assets in 2012 and in 2011. 2012 2011 Rate of return on total assets Did the ratio improve or worsen? b. Diagram the expanded Du Pont system for Hunter for 2012. Insert the appropriate dollar amounts wherever possible. Note: Fill in the [Text] boxes in the diagram below with the correct information. You should not have to add anything to the diagram below. Refer to page 404 in the textbook and pay close attention to where this diagram begins c. Use the Du Pont system to calculate the return on assets for the two years, and determine why they changed. 2012 2011 Return on assets Prob 14-6 Following are financial statements for the Genatron Manufacturing Corporation for 2012 and 2011. ASSETS 2012 2011 Cash $ 40,000 $ 50,000 Accts. Receivable $ 260,000 $ 200,000 Inventory $ 500,000 $ 450,000 Total current assets $ 800,000 $ 700,000 Fixed assets, net $ 400,000 $ 300,000 Total assets $ 1,200,000 $ 1,000,000 LIABILITIES AND EQUITY Accts. Payable $ 170,000 $ 130,000 Bank loan $ 90,000 $ 90,000 GENATRON MANUFACTURING CORPORATION BALANCE SHEET Accruals $ 70,000 $ 50,000 Total current liabilities $ 330,000 $ 270,000 Long-term debt, 12% $ 400,000 $ 300,000 Common stock, $10 par $ 300,000 $ 300,000 Capital surplus $ 50,000 $ 50,000 Retained earnings $ 120,000 $ 80,000 Total liabilities & equity $ 1,200,000 $ 1,000,000 2012 2011 Net sales $ 1,500,000 $ 1,300,000 Cost of goods sold $ 900,000 $ 780,000 Gross profit $ 600,000 $ 520,000 Expenses: general and administrative $ 150,000 $ 150,000 Marketing $ 150,000 $ 130,000 Depreciation $ 53,000 $ 40,000 Interest $ 57,000 $ 45,000 Earnings before taxes $ 190,000 $ 155,000 Income taxes $ 76,000 $ 62,000 Net income $ 114,000 $ 93,000 a. Apply Du Pont analysis to both the 2012 and 2011 financial statements’ data. 2011 2012 Net Income Sales Total Assets Equity ROE b. Explain how financial performance differed between 2012 and 2011. Prob 14-7 This problem uses the financial statements for the Genatron Manufacturing Corporation for the years 2012 and 2011 from Problem 6. a. Calculate Genatron’s dollar amount of net working capital in each year. Net Working Capital 2011 2012 b. Calculate the current ratio and the acid-test ratio in each year. GENATRON MANUFACTURING CORPORATION INCOME STATEMENT Current Ratio 2011 2012 Acid-test ratio 2011 2012 c. Calculate the average collection period and the inventory turnover ratio in each year. Average collection period 2011 2012 Inventory turnover 2011 2012 d. What changes in the management of Genatron’s current assets seem to have occurred between the two years? Prob 14-8 EFN = ((TA/NS)*(∆NS)) - (((AP + AC)/NS)*∆NS) - (((NS13)*(NPM))/(NS)*(RR)) 2013 Forecasted sales (NS13) Change in sales (∆NS) Total assets (TA) Net sales (NS) Accounts payable (AP) Accruals (AC) Net profit margin (NPM) Percent of net income retained in firm (RR) EFN using the percent-of-sales method for the 2012 data. Assume that no excess capacity exists and that one-half of the 2012 net income will be retained in the business. Genatron Manufacturing expects its sales to increase by 10 percent in 2013. Estimate the firm’s external financing needs by

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