operating income available for the common stockholder, and to attract investors that may not otherwise be interested. An investor would buy these types of bonds because it gives you the option to convert to stocks. If converted, the firm would reduce a liability and increase equity on the balance sheet for the amount converted. 5) a. Ratio | Definition | Industry Avg | Rite Aid 2010 | Rite Aid 2009 | Common-size debt
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Friendly Cards Liu Xing 1. In order to calculate the WACC of Creative Design, we need to estimate the beta first. We can calculate the beta(e) from the weighted beta(e)s of the industry. According to Exhibit 5: βe of American Greetings=1.07 and the net income is 33.4, βe of Gibson Greetings=0.93 and the net income is 24.1. So we estimate theβe of CD: 1.07*33.4/(33.4+24.1)+0.93*24.1/(33.4+24.1)=1.01 Re of CD=Rf+βe(Rm-Rf)=8.4%+1.01*7%=15.47% According to Exhibit 7, the Debt of CD=2250 D/V=2250/4500=50%
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I. Statement of Financial Problem Butler Lumber Company, a growing, profitable business has exhausted it’s credit limit with its current bank and needs additional capital to: * Continue to fund growth * Consolidate debt * Improve cash flexibility In this case study, I will examine the following problem: During the years of 1988-1990, why has Butler Lumber increased sales volume but experienced a decrease in cash flow? This problem is historical, and I will base my analysis from information
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Financial statement CASE STUDY Qi Zhang (William) BUSN 101-002 Prof. Sommese 10/17/13 Table of Content Company Overview-------------------------------------------------------2 Financial Statement Research-----------------------------------------2 Financial Statement Analysis------------------------------------------4 Interpretive Analysis-----------------------------------------------------5 Conclusion------------------------------------------------------------------7 Work Cited----
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Finance, Investments, Financial institutions, International Finance. Agency problem- inherent conflicts of interest Formals Assets=Liabilities + Shareholders’ Equity, Income =Revenues – Expenses, Current Ratio=Current Assets/Current Liabilities, Quick ratio or acid-test ratio= (Current Assets – Inventory)/ Current Liabilities Cash Ratio= Cash/ Current Liabilities Total debt= (Total Assets- Total Equity)/ Total Assets, Debt/equity ratio= Total Debt/ Total Equity, Equity Multiplier= EBIT/Interest
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Tootsie Roll Industries The Hershey Company Interpretation and comparison between the two companies' ratios Ratios (pg 735) Ratio Receivable Turnover Ratio (Net Sales/(Average Accounts Receivable) $497,717/ (($32,371+$35,075)/ 2) = 14.76 $4,946,716/(($487,285+$522,673)/ 2) = 9.80 This ratio compares net sales divided by the average accounts reciavable. Tootsie Roll has far less sales but has to extend less credit on average to collect the full amount owed. By placing
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Short-term Assets .......................................................... 1-3 Long-term Assets............................................................ 1-3 Liabilities (Debt) and Equity ......................................................1-4 Debt vs. Equity ................................................................ 1-4 Liability / Equity Accounts
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INTRODUCTION TO ACCOUNTING SEMINAR (1) TRUE/FALSE (NOTE: Show any required calculations in your answers) 1. A corporation is a business that is legally separate and distinct from its owners. 2. Primary users of accounting information are accountants. 3. Accounting is thought to be the "language of business" because business information is communicated to users. 4. The role of accounting is to provide many different users with financial information to make economic decisions.
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fixed assets. Currently, the company’s total liabilities exceed the total assets. Long-term debt consists of “probable future sacrifices of economic benefits arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer” (Kieso, Weygandt, & Warfield, 2007). The company’s long-term liabilities consist of capital lease obligation, note outstanding, mortgage outstanding and other liabilities; the largest of which is the notes payable. The
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Study Case: Hampton Machine Tool Background. Hampton Machine Tool Company, a machine tool manufacturer, was founded in 1915. Hampton's customers are military aircraft and automobile manufacturers in the St. Louis area. Machine Tool Company felt the boom in the 1960`s with record setting profits in the mid- to late- 1960`s. The company slowed down in the 1970`s economic recession caused by Vietnam War and the oil embargo. Hampton stabilized by the late 1970`s
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