MME 3113: Engineering Management
ASSIGNMENT # 1
Total Marks: 100

Computation of financial or management ratios

Problem #1 [8+3+3=14] Consider the balance sheet entries in Table 1 for Iron Eagle Corporation.

(a) Compute (i) Current assets (ii) Current liabilities (iii) Working capital, (iv) Shareholders’ equity for the corporation.

(b) If the firm had a net income of $550,000 after taxes, what is the earning per share?

(c) When the firm issued its common stock, what was the market price of the share?

| |
|Table 1. Balance Sheet Statement as of December 31,2009 |
|Assets |
|Cash $160,000 |
|Marketable securities 210,000 |
|Accounts receivable 160, 000 |
|Inventories 60,000 |
|Prepaid taxes and insurance 40,000 |
|Manufacturing plant at cost $620,000 |
|Less accumulated depreciation 100, 000 |
|Net fixed assets