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BFIN 200 Fall Semester 14 Assignment 1




Question;Assessment Instrument: Assignment 1This instrument assesses the following Course Learning Outcomes (CLO):CLOs:Question # covered inAssessment*Course Learning Outcomes (CLO)1. Examine firms' financial performance using ratios2. Examine TVM principlesStudentscoreQ 1, 2 and 3Q4&5Students Name:.............................................Students ID No:.............................................Marks:Maximum(marks) 20. This constitutes 20% of the total course grade.For full marks in each question, you have to show your detail works. Late submission of assignment will bepenalized by 10% a day.Problem 1:a. Prepare a balance sheet and income statement for Carlos Inc. from the following information:InventoryCommon stockCashOperating expensesShort-term notes payableInterest expenseDepreciation expenseSalesAccounts receivableAccounts payableLong-term debtCost of goods soldBuilding and equipmentAccumulated depreciationTaxesGeneral and administrative expensesRetained earnings6,50045,00016,5501,35060090050012,8009,6004,80055,0005,750122,00034,0001,440850?b. Calculate the current ratio, quick ratio and operating profit margin.Problem 2:3M had a gross profit margin of (gross profit/Sales) of 30% and sales of $9 million last year. 75% of thecompany sales are on credit and the remainder are cash sales. 3M's current assets equal $1.5 million, itscurrent liabilities equal $300,000, and it has $100,000 in cash plus marketable securities.a. If 3M's accounts receivable are $562,500, what is its average collection period?b. If 3M reduces its days in receivable (average collection period) to 20 days, what will be its new level ofaccounts receivable?c. 3M's inventory turnover ratio is 9 times. What is the level of 3M's inventories.Problem 3:Hattaway Inc. has total assets of $63 million and total debt of $42 million. The company also hasoperating profits of $21 million with interest expenses of $6 million.a. What is Hattaway debt ratio?b. What is its times interest earned?Problem 4:You would like to buy your first home in 5 years and you are saving towards your down payment whichyou estimate at AED 100,000.How much do you need to invest today to get AED 100,000 in 5 years, if the annual interest rate if 10%?Problem 5:The gross sales of your company this year were estimated at AED 2.3 million. Your marketing and salesteams are working towards increasing these sales at 5% a year for the next 5 years. What will be thelevel of sales of your company five years from now at this rate?


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