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Final Exam-Part 2: Instructions: Answer The Given Problems Below. Show All The Necessary Computations

The document is a practice exam for a financial management course. It contains 5 problems requiring students to complete balance sheets and income statements based on financial ratios and other data provided. The problems ask students to calculate missing values, construct full financial statements, and calculate key financial metrics like return on assets, return on equity, and profit margin.

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669 views2 pages

Final Exam-Part 2: Instructions: Answer The Given Problems Below. Show All The Necessary Computations

The document is a practice exam for a financial management course. It contains 5 problems requiring students to complete balance sheets and income statements based on financial ratios and other data provided. The problems ask students to calculate missing values, construct full financial statements, and calculate key financial metrics like return on assets, return on equity, and profit margin.

Uploaded by

sophia lorreine chatto
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Pamantasan ng Cabuyao

Katapatan Homes Subdivision, Brgy. Banay- Banay, City of Cabuyao, Laguna


Financial Management Part 1

Final Exam- Part 2

Name: Score:
Course & Section: Date:

Instructions: Answer the given problems below. Show all the necessary computations.

Problem I:

A skeleton of Rosario Company’s balance sheet appears as follows (amounts in thousands):

Cash 75 Total current liabilities 1,900


Receivable (a) Long- term note payable (e)
Inventories 725 Other long- term liabilities 980
Prepaid expenses (b)
Total Current Assets (c) Stockholder’s equity 2,325
Plant Assets, net (d)
Other assets 2,000 Total liabilities and
Total Assets 6,800 Stockholders’ equity (f)

Rosario’s current ratio is 0.80 and its acid test ratio is 0.40.

Required: Complete Rosario Company’s balance sheet. 30 points

Problem II:

We are given the following information for the Coleman Machine Tools Corporation.

Sales (credit) 7,200,000


Cash 300,000
Inventory 2,150,000
Current Liabilities 1,400,000
Asset Turnover 1.20 times
Current ratio 2.50 times
Debt- to- assets ratio 40%
Receivables turnover 8 times

Current assets are composed of cash, marketable securities, accounts receivable, and inventory.
Calculate the following balance sheet items: 20 points

a. Accounts receivable
b. Marketable securities
c. Fixed assets
d. Long- term debt

Problem III:

Easter Egg and Poultry Company has 1,000,000 in assets and 600,000 of debt. It reports net income of
100,000. 15 points

a. What is the return on assets?


b. What is the return on stockholders’ equity?
c. If the firm has an asset turnover of 2 times, what is the profit margin (return on sales)?

Problem IV:

Z Company found these pieces of his average balance sheet and key ratio report in his gerbil cage:

Cash ? Gross Margin percentage 25%


Accounts receivable ? Debt to equity ratio 0.25:1
Inventory 80,000 Current ratio 3:1
Fixed assets (net) ? Inventory turnover 15times
Current liabilities 100,000 Days sales in receivable 15days
Common stock 100,000 (based on 360 days)
Retained earnings ?

Required: Add as much to his balance sheet as possible from the date provided. 20 Points

Problem V:

Assume that net income was 6,000. No other information is known, except the following:

Return on equity 10% Return on sales 4%


Gross margin percentage 60% Income Tax rate 40%
Current ratio 3:1 Return on assets 5%
Inventory turnover 4 Days sales in receivables 90
Long- term debt to equity 2:3

Required: Using the preceding ratios, construct an income statement (25 points) and a balance sheet (25
points) with as much as detail as possible.

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