1, A firm has net working capital of $2,138and current assets of $6,665. What is

Question

1, A firm has net working capital of $2,138and current assets of $6,665. What is the current ratio?

2. ABC Inc. has sales of $267,316, costs of $137,213, depreciation expense of $35,595, and interest paid of $36,056. The tax rate is 39 percent. How much net income did the firm earn for the period?

3. You have $10,205 you want to invest for the next 33 years. You are offered an investment plan that will pay you 17.5 percent per year for the next 9 years and 17.4 percent per year for the remaining years. How much will you have at the end of the 33 years?

4The ABC Company has a net profit margin of 4.14 percent on sales of $270,894. The company has 14,079 shares of stock outstanding at a market price of $11.8 per share. What is the price-earnings ratio?

Explanation / Answer

1)WC= CA-CL

2138=6665-cl

cl=4527

Current ratio= CA/Cl=1.472

2)

3) first find value at the end of 9 years at rate=17.5%

PV=10205

FV=43566.6

Now this value will grow at 17.4% for remaining year

FV at 33 years= 2047331.3

4)

Earning=270894*4.14%=11215

EPs=11215/14079=.79

PE ratio = ..79/11.8 =6.7%

Sales                      267,316.00 Less: cost                        35,595.00 Less: Int                        36,056.00 PBT                      195,665.00 Tax                        76,309.35 Net income                      119,355.65

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