Financial management, Exercises of Financial Management

Download Financial management and more Exercises Financial Management in PDF only on Docsity! Assignment Financial Statement Analysis Name: ___________________________________________ Score: ________ Section: ________________________________ Instruction: Encircle the letter that corresponds to your answer. Financial Statement Analysis 1. Selected information from the accounting records of the Szessar Company is as follows: Net accounts receivable at December 31, 2014............................................... P 900,000 Net accounts receivable at December 31, 2013............................................... 1,000,000 Accounts receivable turnover.......................................................................... 5 to 1 Inventories at December 31, 2014................................................................... P1,100,000 Inventories at December 31, 2013................................................................... 1,200,000 Inventory turnover ...................................................................................... 4 to 1 What was Szessar’s gross profit for 2014? a. P150,000 b. P400,000 c. P200,000 d. P500,000 2. The retained earnings of LA Corp. are P150,000 and P275,000, for the years 2014 and 2013 respectively. The net income for the year 2013 is P250,000. The preferred stockholder is to receive 10% of their equity. How much will be given to the common stockholder if the equity of the preferred stockholder is P1,250,000.00? a. P125,000 b. P0 c. P 62,500 d. none of the above 3. On January 1, 2013, FLT Company’s beginning inventory was P400,000.00. During 2013, FLT Company purchased P1,900,000 of additional inventory. On December 31, 2013, the inventory was P500,000. What is the inventory turnover for 2013? a. 4.6 b. 3.8 c. 4.0 d. 3.6 4. Asar Corporation had a current ratio of 2.0 at the end of 2014. Current assets and current liabilities increased by equal amounts during 2013. What are the effects on net working capital and on the current ratio, respectively? a. no effect; increase. b. increase; increase c. no effect; decrease. d. decrease; decrease 5. At December 31, 2013, FLT Company had the following balances in the accounts it maintains at CBC: Checking account No. 201 P800,000 Checking account No. 202 (100,000) Money market account 500,000 BSP Treasury bill, 90 days due March 1, 2014 300,000 BSP treasury bill, 120 days due January 1, 2014 400,000 In its December 31, 2013 balance sheet, what amount should FLT report as cash and cash equivalents? a. P2,000,000 b. P1,500,000 c. P1,600,000 d. answer not given 6. The following figures are taken from Ethaniel Company’s financial statements for the calendar years 2013 and 2012: 2013 2012 Total assets P900,000 P750,000 Long-term debt (12% interest rate) 125,000 8% Preferred stocks, P100 par value 225,000 225,000 Total stockholders’ equity 600,000 550,000 Net income (after tax of 30%) 70,000 What is the return on average total assets? a. 9.8% b. 12.95% c. 10.5% d. 8.48% 7. The condensed balance sheet as of December 31, 2014 of Friendster Corp. is given below: Assets Liabilities and Stockholders’ Equity Cash P 60,000 Accounts Payable P ? Trade receivable (net) ? Current Notes Payable 40,000 Inventory ? Long-term payable ? Fixed Assets 252,000 Common Stock 140,000 Retained Earnings ? P480,000 P480,000 Additional information: Current ratio 1.9 to 1 Ratio of total liabilities to total stockholder’s equity 1.4 Inventory turnover based on sales and ending inventory 15 times