The old Attachment: 6345527.xls somehow is dead. Someone please fix the link 1. Penguin Pucks, Inc., has current assets of $5,100, next fixed assets of $23,800, current liabilities of $4,300, and long-term debt of $7,400. What is the value of the shareholders? equity account for this firm? How much is net working capital? 2. Papa Roach Exterminators, Inc., has sales of $586,000, costs of $247,000, depreciation expense of $43,000, interest expense of $32,000, and a tax rate of 35 percent. What is the net income for this firm? 3. Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7 million. The machinery can be sold to the Romulans today for $4.9 million. Klingon?s current balance sheet shows net fixed assets of $3.7 million, current liabilities of $1.1 million, and net working capital of $380,000. If all the current assets were liquidated today, the company would receive $1.6 million cash. What is the book value of Klingon?s assets today? What is the market value? 4. So long, Inc., has sales of $27,500, costs of $13,280, depreciation expense of $2,300, and interest expense of $1,105. If the tax rate is 35 percent, what is the operating margin? What is the net profit margin? 5. The 2008 balance sheet of Saddle Creek, Inc., showed current assets of $2,100 and current liabilities of $1,380. The 2009 balance sheet showed current assets of $2,250 and current liabilities of $1,710. What was the company?s 2009 change in net working capital, or NWC? 6. In March 2005, General Electric (GE) had a book value of equity of $113 billion, 10.6 billion shares outstanding, and a market price of $36 per share. GE also had cash of $13 billion, and total debt of $370 billion. a. What was GE?s market capitalization? What was GE?s market-to-book ratio? b. What was GE?s book debt-equity ratio? What was GE?s market debt-equity ratio? c. What was GE?s enterprise value? 7. Suppose that in 2006, Global Conglomerate Corporation (from Chapter 2 in the text) launched an aggressive marketing campaign that boosts sales by 15%. However, their operating margin fell from 5.57% to 4.50%. Suppose that they have no other income, interest expenses are unchanged, and taxes are the same percentage of pretax income as in 2005 (See Table 2.2 in the text). a. What is Global?s EBIT in 2006? b. What is Global?s net income in 2006? c. If Global?s P/E ratio and number of shares outstanding remain unchanged, what is Global?s share price in 2006? 8. In July 2005, American Airlines (AMR) had a market capitalization of $2.3 billion, debt of $14.3 billion, and cash of $3.1 billion. American Airlines had revenues of $18.9 billion. British Airways (BAB) had a market capitalization of $5.2 billion, debt of $8.0 billion, cash of $2.9 billion, and revenues of $13.6 billion. a. Compare the market capitalization-to-revenue ratio (also called the price-to-sales ratio) for American Airlines and British Airways. b. Compare the enterprise value-to-revenue ratio for American Airlines and British Airways.
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