I am pretty sure all answers are wrong. Help with everything if possible For que

Question

I am pretty sure all answers are wrong. Help with everything if possible For question one through six use the following financial statements Name: Bryon Xod and information Balance Sheet (millions) 52 Cash SR Accts Rec. .9 .47 cos Inventory 32 0 Accts Payable .35 I Notes Payable (longer than 1 year) A Long term debt 2.8 Deor Fixed Assets 4.85 Equity 3.SS Total Assets 6.54 Income Statement Net Sales Cost of Sales Gross Profit Selling general and administrative R & D Depreciation Operating Income Other Income EBIT Pretax income Taxes Net Income Sales 2,300,000 pieces 7.50 each Depreciation 99,000.00 Operating margin .062 No other income Int expense 315,000.00 Taxes 28% Payout ratio 34% Tolal Pevee: 1, 20,soo

Explanation / Answer

working Note:

1 Sales=2300000*7.5=17250000

2operating margin=0.62

3operating income= 17250000*.62= 10695000

Answer :

1. Cash flow:- Operating profit+Depreciation

=10695000+99000

=10794000

2.The company have sufficient cash flow to run the business hence company can grow without external financing but if company take external finance it is more beneficial to the company company can invest internal fund in any sources where return is high and run business with external fund.at lower rate.

4 using External finance company can grow 2.8+.4=3.2 million

One of the advantages of external funding is it allows you to use internal financial resources for other purposes. If you can find an investment that has a higher interest rate than the bank loan your company just secured, it makes sense to preserve your own resources and put your money into that investment, using the external financing for business operations. You can also set aside your internal financial resources for cash payments to vendors, which can help improve your company's credit rating.

5. Debt to equity ratio= total debt/ equity

Total debt=2.8

Equity= 6.54-0.35-0.40-2.80

=2.99 million

Debt to Eqity is= 2.8/2.99

=0.936 million

6. Current Ratio = Current Asset / Current Liability

Current Asset= 0.90+0.47+0.32=1.69

Current Liability=0.35

Ratio= 1.69/.35=4.82

7

The Goal of Financial Management is Maximise Profit Minimize Expenses And Maximize Market Share

8

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