FIN 610 Short Term Financial Management

Hello,

 

I need guidance on the attachment which has 3 tabs. I did all of the work that I could figure out but may need a review. I only need formulas in the tan sections and the discussions I will work on. 

Problem One

)

$3,500

$5,500

																																																																												Module One Homework Assignment
Student’s Name:	John Wingate
Problem 1 (From Chapter 1)
For each part below, calculate the amount of cash received by Company ABC from its customers:
		(		In thousand of dollars
Beginning Receivables	Ending Receivables	Sales	Amount of Cash Received
	a.	$100	$600			$3,000			$2,500
	b.				$2,000		$3,500	$7,000		$5,500
	c.			$1,200	$7,800

Problem Two

Module One Homework Assignment

$2,000

$1,200

$4,000

$3,000 $2,000

$1,000 $400

$3,000 $2,500 $500

2009

$2,000 $1,200

2010

$1,800

2011 Decrease of Inventory

$2,500

Problem 2 (From Chapter 1)
Anthlam Electronics reported the following information:
(In thousand of dollars)
	Year	Beginning	Accounts Payable	Ending Accounts Payable	Beginning	Inventory	Ending Inventory	Cost of good sold	Amount of Purchases	Dollar Amount of Cash Paid to Suppliers
						2009	$200		$1,000		$4,000	$3,200
	2010		$500		$400		$1,800	$800	$700
	2011	$5,000	($100)
For each year, calculate the Amount of Purchases and the Dollar Amount of Cash Paid to Suppliers
Notes
Increase of Inventory
	Decrease of Inventory	($1,000)
($2,000)

Problem Three

Module One Homework Assignment

(In thousand of dollars)

Year

2009

0

0

0

0

0

$ 300 $ 300

50

0

Inventory

$ 200

0

0

0

0

Accounts Payable $ 75 $ 100 $ 125

0

$ 200

$ 50 $ 60 $ 80 $ 100

$ 15 $ 20 $ 15 $ 30

$ 20 $ 20

$ 20

$ 100 $ 95 $ 90 $ 85 $ 80

$ 450

$ 800

$ 600

$ 175 $ 200

$ 5 $ 5 $ 5 $ 4 $ 4

$ 80 $ 85 $ 90 $ 95 $ 100

$ 295

$ 50.00 $ 50.00 $ 50.00 $ 50.00

below:

a.

2005 2006 2007 2008 2009

Carry-out answers to only a maximum of 3 decimal places

$ 3,036,000.00

In thousand of dollars

In thousand of dollars

b.

(In thousand of dollars) 2006 2007 2008 2009

$ 254 $ 274 $ 295 $ 296

Depreciation N/A $ (100) $ (150) $ (200) $ (250)

N/A $ (100)

$ (150) $ (150)

N/A $ (50) $ (50) $ 125 $ (150)

N/A $ 25 $ 25 $ 25 $ 50

N/A $ 15

c.

2005 2006 2007 2008 2009

2005 2006 2007 2008 2009

f.

Problem 3 (From Chapter 2)
The following financial information is provided for Iron Works Corporation of America:
			2005					2006					2007					2008
Cash & equivalents					$ 100								$ 20				$ 25				$ 30						$ 5
Accounts receivable	$ 200				$ 4		$ 60
	$ 75			$ 125		$ 175	$ 50
Gross fixed assets					$ 80	$ 800			$ 85			$ 90			$ 95
(Accumulated depreciation)			$ (50)			$ (100)					$ (150)		$ (200)		$ (250)
Total assets	$ 3,130	$ 3,331	$ 3,432	$ 3,508	$ 4,009
			$ 15
Notes payable	$ 110
Accrued operating expenses	$ 40
Current maturities	$ 18	$ 19
Long-term debt
Total liabilities	$ 260			$ 295	$ 328	$ 384
Shareholders equity	$ 2,870	$ 3,036	$ 3,104	$ 3,124	$ 3,559
Revenues	$ 1,600	$ 1,700	$ 1,800	$ 1,900	$ 2,000
Cost of goods sold	$ 640	$ 680	$ 720	$ 760
Operating expenses		$ 600	$ 510	$ 540	$ 570
	Depreciation	$ 157	$ 167	$ 172
Interest
Taxes
Net income	$ 119		$ 254		$ 274		$ 296
Dividends					$ 50.00
Using the information provided in the above financial statements, perform the following analyses and complete parts a. through	f.
SOLVENCY RATIOS
Current Ratio	12.038	11.292	10.463	9.135	8.909		Carry-out answers to only a maximum of 3 decimal places
Quick Ratio	11.750	10.868	9.930	9.005	8.464
Net Working Capital	$ 2,870,000.00		$ 3,036,000.00	$ 3,124,000.00	$ 3,559,000.00
Working Capital Requirements
Working Capital Requirements/Sales
Discuss and interpret the trends that you see:
Calculate the cash flow from operations for 2006 through 2009 and the cash conversion efficiency:
Net Income						N/A
(Increase) decrease in AR	$ – 0
(Increase) decrease in INV
Increase (decrease) in AP
Increase (decrease) in Accruals
Cash Flow from Operations
Interpret the trends:
Calculate the cash conversion period for each year from 2005 to 2009:
Days Sales Outstanding
Days Inventory Held
Days Payables Outstanding
Operating Cycle
Cash Conversion Period
Interpret the trends:
d.	Using your calculated cash flow from operations to be the following, calculate the current liability index.
Cash Flow From Operations
Current Liquidity Index	In Days removed from cash
Interpret the four (4) year trend:
e.	Compare and contrast your interpretation of the of the current ratio trend with your interpretation of the current liquidity ratio.
What is your opinion of the firm’s liquidity position and why?

References

References