02 Jan Elddir, Inc. has net
Question 1
5 / 5 pts
Ernie Inc. has current assets of $73,000, net fixed assets of $25,000, current liabilities of $12,000, and long term debt of $27,000. What is the value of shareholder’s equity for the firm?
83,000
87,000
assets = liabilities + owner’s equity, solve for owner’s equity
No answer text provided.
Question 2
0 / 10 pts
During 2014, Eagle Beach Company (EBC) had sales of $575,000, cost of goods sold of $425,000, administrative and selling expenses of $95,000, depreciation expense of $140,000 and interest expense of $70,000. The tax rate is 35 percent. Ignore any tax loss carryback or carry forward provisions. What is the operating cash flow for EBC?
$55,500
-$15,000
Your taxable income if calculated correctly is negative (-155,000) so check how you handled taxes. Do you have to pay taxes on negative taxable income? No, so what would your taxes be?
Question 3
10 / 10 pts
If UARE, Inc. has sales of 8,500, total assets of 6000, a debt to equity ratio of 1.3 and a return on equity of 12 percent, what is UARE’s net income?
1020.00
313.04
This is a two-step problem where you had to find the profit margin by using the DuPont Identity and then use the profit margin and sales to calculate net income.
628.26
Question 4
0 / 5 pts
A firm has net income of 325,000, profit margin of 9.3%, accounts receivables of 175,000 and a percentage of sales on credit of 80 percent. What is the firm’s days sales in receivables?
22.85 days
196.54 days
18.28 days
Incorrect. Use credit sales not total sales when calculating the receivables turnover. Then calculate days in sales as 365/Receivables Turnover.
Question 5
5 / 5 pts
Elddir, Inc. has net income of net income of 2500, a tax rate of 34%, interest expense of 4500 and deducted depreciation expense of 3500. What is Elddir’s cash coverage ratio?
2.62
1.84
3.41
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