Question

1. The 2014 balance sheet of Sugarpova’s Tennis Shop, Inc., showed long-term debt of $5.5 million, and the 2015 balance sheet showed long-term debt of $5.9 million. The 2015 income statement showed an interest expense of $135,000. What was the firm’s cash flow to creditors during 2015?

2. Billy’s Exterminators, Inc., has sales of $746,000, costs of $300,000, depreciation expense of $52,000, interest expense of $36,000, and a tax rate of 35 percent. What is the net income for this firm?

3. The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $6.3 million, and the 2015 balance sheet showed long-term debt of $6.5 million. The 2015 income statement showed an interest expense of $220,000. During 2015, the company had a cash flow to creditors of $20,000 and the cash flow to stockholders for the year was $75,000. Suppose you also know that the firm’s net capital spending for 2015 was $1,480,000, and that the firm reduced its net working capital investment by $91,000.

What was the firm’s 2015 operating cash flow, or OCF?

4.

If Roten Rooters, Inc., has an equity multiplier of 1.39, total asset turnover of 1.40, and a profit margin of 8.50 percent. What is its ROE?

5.

Braam Fire Prevention Corp. has a profit margin of 9.70 percent, total asset turnover of 1.42, and ROE of 18.61 percent. What is its firm's debt-equity ratio?

6.

Y3K, Inc., has sales of $4,700, total assets of $2,955, and a debt−equity ratio of 1.20. If its return on equity is 17 percent, what its net income?