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accounting assignment- When a financial analyst examines the credit risk of a company, it is common that he o

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Question;Homework Assignment ? Chapter 5;1.;When a financial analyst examines the credit risk of a company, it is common;that he or she uses a set of factors that all begin with the letter;C." Each factor provides a consideration that enters into the;lending decision. List and discuss how each of the factors affects a company's;credit risk.;ANS;1.;2.;Given the following information, calculate for Year 2 the number of days of;working capital financing the firm will need to obtain from other sources?;Year 1;Year 2;Accounts Receivable, net;$ 518;$ 562;Accounts Payable;203;192;Inventory;535;564;Credit Sales;3,205;3,636;Cost of Goods Sold;2,037;2,294;Selling and Admin. Expense;1,081;1,131;3. Refer to the financial statement data;for Patriot Corp. for 2011 and 2010. Complete the table by computing the;ratios.;Patriot Corp.;Balance Sheet;As of December 31;2011;2010;Assets;Cash and Cash Equivalents;$ 69,000;$ 55,250;Accounts Receivable;126,500;80,750;Inventory;92,000;63,750;Current Assets;287,500;199,750;Equipment;194,063;148,750;Less: Accumulated;depreciation;-38,813;-29,750;Equipment-Net;155,250;119,000;Land;132,250;106,250;Total assets;$575,000;$425,000;Liabilities;Accounts Payable;$ 69,000;$ 42,500;Accrued Salaries Payable;51,750;42,500;Rent Expense Payable;35,750;28,500;Income Tax Payable;4,788;1,250;Current Liabilities;161,288;114,750;Long-term note payable;172,500;102,000;Total Liabilities;333,788;216,750;Stockholders? Equity;Common stock;115,000;89,250;Retained earnings;126,212;119,000;Total liabilities and;stockholders? equity;$575,000;$425,000;Patriot Corp.;Income Statement;For the year ended December;31, 2011;Revenues;$ 373,750;Cost of goods sold;(224,250);Gross Profit;$149,500;Operating Expenses;Depreciation expense;(9,062);Salary expense;(56,063);Insurance Expense;(44,850);Rent Expense;(18,688);Interest Expense;(6,120);Total Operating Expenses;(134,783);Income from Operations;14,717;Income Tax Expense;(4415);Net income;$ 10,302;Dividends paid to Common;Shareholders;$ 3,090;Financial Ratio to be;calculated;2011;2010;Current Ratio;Quick Ratio;Days Accounts Receivable;N/A;Days Inventory;N/A;Days Accounts Payable;N/A;Liabilities to Total Assets;Interest Coverage ratio;N/A;N/A - Not Applicable for;the given year

 

Paper#43009 | Written in 18-Jul-2015

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