FIN 322 Study Guide - Final Guide: Financial Accounting Standards Board, Retained Earnings, Financial Ratio

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jadecockroach949

5 Aug 2019

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Statement of cash flows provides a summary of the firm"s operating, investment, and financing cash flows and reconciles them with changes in its cash and marketable securities during the period. Notes to the financial statements explanatory notes keyed to relevant accounts in the statements; they provide detailed information on the accounting policies, procedures, calculations, and transactions underlying entries in the financial statements. Mandates that u. s. -based companies translate their foreign-currency-denominated assets and liabilites into u. s. dollars, for consolidation with the parent company"s financial statements. This process is done by using the current rate method. Current rate method technique used by u. s. based companies to translate their foreign-currency- denominated assets and liabilites into u. s. dollars, for consolidation with the parent company"s financial statements, using the year-end exchange rate. Benchmarking a type of cross-sectional analysis in which the firm"s ratio values are compared with those of a key competitor or with a group of competitors that it wishes to emulate.

Related Questions

Presented below are the December 31 financial statements for Apple Corporation (in $ Millions).

Apple Corporation Balance Sheets as of December 31 Assets Year 2 Year 1

Cash $29,025 $162,000

Accounts Receivable 263,250 141,750

Inventory 243,000 303,750

Long-Term Investments - 81,000 Totals $535,275 $688,500

Liabilities and Shareholders' Equity

Accounts Payable $101,250 $162,000

Other Current Liabilities 32,400 20,250

Notes Payable 94,500 135,000

Common Stock 168,750 168,750

Retained Earnings 138,375 202,500

Totals $535,275 $688,500

Apple Corporation Income Statement For the Year Ended December 31, Year 2

Sales $756,000

Cost of Goods Sold 506,250

Gross Profit 249,750

Operating expenses 243,000

Income from operations 6,750

Loss on Sale of long term investment (10,125)

Net loss $(3,375)

Cash dividends of $60,750 were paid to shareholders during Year 2. Prepare a statement of cash flows using the direct method.

taupefly312

Financial statements of Ansbro Corporation follow:

Ansbro Corporation Comparative Balance Sheet
	Ending Balance	Beginning Balance
Assets:
Cash and cash equivalents	$32	$29
Accounts receivable	82	80
Inventory	41	39
Property, plant and equipment	648	560
Less: accumulated depreciation	346	307
Total assets	$457	$401
Liabilities and stockholders' equity:
Accounts payable	$49	$68
Bonds payable	135	190
Common stock	92	80
Retained earnings	181	63
Total liabilities and stockholders' equity	$457	$401

Income Statement
Sales	$745
Cost of goods sold	373
Gross margin	372
Selling and administrative expenses	127
Net operating income	245
Income taxes	87
Net income	$158

Cash dividends were $40. The company did not dispose of any property, plant, and equipment. It did not issue any bonds payable or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.

The net cash provided by (used in) investing activities for the year was:

$12

$(88)

$(55)

$(40)

blushtoad595

Please help with question D

Last year Rattner Robotics had $5 million of operating income. Its depreciation expense was $1 million, its interest expense was $1 million, and its corporate tax rate was 40%. At year-end, it had $14 million in current asset, $3 million in accounts payable, $1 million in (expense) accrualâs, $2 million in notes payable, and $15 million in net plant and equipment. Rattner had no other current liabilities. Assume that Rattner's only noncash item was depreciation.

a. What was the company's net income?

b. What was its net operating working capitals (NOWC)?

c. What was its net working capital (NWC)?

d. Rattner had $12 million in net plant and equipment the prior year. Its net operating working capital has remained constant over time. What is the company's free cash flow (FCF) for the year that just ended?

e. Rattner had 500,000 common shares outstanding and the common stock amount on the balance sheet is $5 million. The company has not issued or repurchased common stock during last years. Last year's balance in retained earnings was $12 million and the firm paid out dividends of $1.2 million during the year. Develop Rattner's end-of-year Statement of StockHolders Equity.

What was the company's net income?

Company's net income = (operating income - interest expense)*(1-tax rate)

(5 -1)*(1-40%)

Company's net income = $ 2.40 Milliion

What was its net operating working capitals (NOWC)?

Net operating working capitals = current asset - accounts payable - accruals

14 - 3 - 1

Net operating working capitals = $ 10 Million

What was its net working capital (NWC)?

Net working capital = current asset - Current liabilty

14 - (3 + 1 + 2)

Net working capital = $ 8 Million

Rattner had $12 million in net plant and equipment the prior year. Its net operating working capital has remained constant over time. What is the company's free cash flow (FCF) for the year that just ended?

End of Year Statement of Stockholders Equity
Particulars
Common Stock		5,000,000.00
Retained earnings		10,800,000.00

Total Stockholders Equity		15,800,000.00


	Retained earnings =last years earnings-dividend paid
	12,000,000.00-1,200,000.00=10,800,000.00

redfish597

FIN 322 Study Guide - Final Guide: Financial Accounting Standards Board, Retained Earnings, Financial Ratio

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