Finc311-013 _assignment #2 | Business & Finance homework help

 FINC311-013 

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Fall 2014

Assignment 2

Instructions:  Assignment should be typed (word-processed) and submitted on Sakai by 11:55pm on Monday September 29.

 

Balance Sheets as on 31st Dec 2012& 31st Dec 2013

 

31st Dec 2012

31st Dec 2013

 

 

Current Assets:

       

Cash

$500

$600

 

 

Accounts Receivables

$2,000

$3,000

 

 

Inventory

$1,500

$2,500

 

 

Total Current Assets

$4,000

$6,100

 

 

Fixed Assets:

   

 

 

Buildings

$3,000

$4,000

 

 

Furniture & office equipment

$1,000

$1,500

 

 

Total Fixed Assets

$4,000

$5,500

 

 

Total Assets

$8,000

$11,600

 

 

 

Liabilities:

   

 

 

Current Liabilities:

   

 

 

Accounts Payable

$1,000

$1,200

 

 

Notes Payable

$500

$500

 

 

Interest Payable

$100

$120

 

 

Total Current Liabilities

$1,600

$1,820

 

 

 

Shareholder’s Equity:

   

 

 

Common Stock

$5,000

$7,500

 

 

Retained earnings

$1,400

$2,280

 

 

Total Stockholder’s equity

$6,400

$9,780

 

 

Total Liabilities & Stockholder’s equity

$8,000

$11,600

 

 

 

 

1.       Create a comparative balance sheet for 2012-2013.

 

2.      Provide an analysis of the firm’s financial position from 2012 to 2013.

 

 

 

 

Income Statements for the years ended 31st Dec 2012& 31st Dec 2013

 

31st Dec 2012

31st Dec 2013

 

 

Sales

$7,000

$9,000

 

 

Less: Cost of goods sold

$5,000

$6,400

 

 

Gross profit

$2,000

$2,600

 

 

Less: Operating expenses

   

 

 

General & administrative expenses

$200

$300

 

 

Selling & distribution expenses

$400

$500

 

 

Other operating expenses

$100

$150

 

 

Operating profit

$1,300

$1,650

 

 

Less: Interest expenses

$300

$400

 

 

Net income before taxes

$1,000

$1,250

 

 

Less: Taxes at 30%

$300

$375

 

 

Net Income after taxes

$700

$875

 

 

 

 

 

3.      Create common-size income statements for 2012 and 2013.

 

  1. How does the financial performance in 2012 compare to 2013?

 

5.      Calculate the following ratios for 2012 and 2013 from the balance sheets and income statements above:

      Current ratio, Debt ratio, Debt-equity ratio, Return on Assets, Return on equity, Fixed

asset turnover, Total asset turnover, Inventory turnover, Accounts receivable turnover and Net

profit margin.

 

6.      Comment on the trend in liquidity, solvency, profitability and asset management for this firm.  

 

7.      Write a paragraph each for the following topics:

 

a)      Fundamental Analysis

b)      Circuit Breakers

c)      Burger King and Tax inversion