P6-38 (30 minutes) a. Best Buy (a retailer) reports a much higher receivables turnover rate than does the manufacturer, Caterpillar. The likely reason for this is that retail sales are usually via cash, check, or credit cards (which are like cash for the retailers). Recall that the turnover ratio includes credit sales, but, because most firms do not report credit sales, we are forced to use total sales when we calculate the turnover ratio. Using total sales instead of credit sales overstates
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at 1% (4,000) December 31, 2015 Account balance $395,950 The following additional information is to be considered. 1. To acquire land and building, the company paid $80,000 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair value of the stock is $117 per share. 2. Cost of removal of old buildings amounted to $9,800, and the demolition company retained all materials of the building. 3. Legal fees covered the following. Cost of organization $ 610 Examination
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the objectives were define as prepare a statement of cash flows using both direct and indirect methods, apply ratio, vertical, and horizontal analyses to financial statements and prepare journal entries associated with the issuance of preferred and common stocks and the declaration and payment of dividends. Cash flows will identify a company's sources and uses of cash. Companies are required to prepare a statement of cash flows in their annual reports because it contains essential data for others
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December 31, 2011, Schroeder Corporation had the following stock outstanding. 8% cumulative preferred stock, $100 par, 107,500 shares | $10,750,000 | Common stock, $5 par, 4,000,000 shares | 20,000,000 | During 2012, Schroeder did not issue any additional common stock. The following also occurred during 2012. Income from continuing operations before taxes | $21,650,000 | Discontinued operations (loss before taxes) | 3,225,000 | Preferred dividends declared | 860,000 | Common dividends declared
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Alternative2: Invest in preferred stock * Alternative 3: Invest in common stock * Alternative 4: Do not invest in any of the three previously mentioned alternatives 3 Identification of Possible Outcomes & State of Nature Based on the alternatives presented in chapter 2, the following outcomes can be defined: * Alternative 1: Invest in corporate bonds and get at least $20,000 back at the end of five years. * Alternative 2: Invest in preferred stock and see an increase of the
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UNIVERSITY OF WASHINGTON Graduate School of Business Administration Finance 553 CAPITAL INVESTMENT PLANNING Winter 2003 Professor Robert C. (Rocky) Higgins 306 Mackenzie Hall Tel: 543-4379 E-mail: rhiggins@u.washington.edu Homepage: http://us.badm.washington.edu/higgins/ (From here you’re one click from the class page) Office Hours: M, W: 10:30 – 12:00 COURSE OBJECTIVE Capital Investment Planning is a case course examining corporate investment decisions and related issues in
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long- term securities) =($10,000) Increase in plant operations and equipment = ($400,000) Net cash flows from investing activities = ($390,000) Cash flows from financial activities Increase in bonds payable = $50,000 Preferred stock dividends paid = ($10,000) Common stock dividends paid = ($50,000) Net cash flows from financial activities = ($10,000) Net increase ( decrease) in cash flows = $30,000 #28 Describe the general relationship between net income and net cash flows from operating
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------------------------------------------------- Top of Form Grading Summary | Grade Details - All Questions | 1. | Question : | (TCO D) A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price? | | | Student Answer: | | $17.39 | | | | $17.84 | | | | $18.29 | | | | $18.75 | | | | $19.22 | | Instructor
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probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock? (Points : 20) 4. (TCO G) Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after
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◄Ticker WES-AU Wesfarmers Ltd Country: AUSTRALIA Industry: Consumer Services Sector: General Retailers Exchange: ASX - ALL MARKETS General Info as of 03/04/2016 (Currency: AUD) Price (Previous Close): Price - 52 Week High: Price - 52 Week Low: Median Price Target: Balance Sheet Statement (Currency: AUD) 40.37 45.00 36.65 41.44 Cash Left Latest Period at: YoY % Chg Cash & Short Term Investments Dividend Yield (Indicated): P/E (NTM): Shares Outstanding (MIL):
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