Please match the term or question with the correct answer.
- A. B. C. D. E. F. G. H. I. Define the term opportunity cost of time.
- A. B. C. D. E. F. G. H. I. Define the term:Behavioral financial planning
- A. B. C. D. E. F. G. H. I. What is TPM?
- A. B. C. D. E. F. G. H. I. Define life cycle theory?
- A. B. C. D. E. F. G. H. I. Define Capital expenditures.
- A. B. C. D. E. F. G. H. I. Define Pro forma Statements
- A. B. C. D. E. F. G. H. I. An example of Economies of Scale
- A. B. C. D. E. F. G. H. I. Why is the Total Portfolio Management approach unique?
- A. B. C. D. E. F. G. H. I. What are operating activities?
A. Cash outflows that provide household operating benefits for anextended period of time.
B. The analysis of individual conduct and the development ofpractical techniques to improve financial decision making. Its goalis to educate and establish practices that close the gap betweenactual and ideal planning, thereby bringing people closer to theirown goals.
C. A householdâs sharing of fixed costs for shelter and othergoods
D. Individuals plan for future events using current and futurefinancial resources with the objective of smoothing fluctuations instandard of living over time and attaining predetermined goals.
E. The day-to-day financial functions of the household.
F. TPM is unique because it analyzes all household assets andobligations.
G. The alternative to time spent in household work or leisure timepursuits. It indicates that the time spent on bothactivities can be compared with the money which could be earned byworking in a job.
H. Statements that include projections.
I. Total Portfolio Management takes all assets and liabilities intoone household portfolio including human assets, real assets, andnon-financial assets.
Please match the term or question with the correct answer.
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Related questions
Just need the last two questions answered A and B at the bottom of the document
Youâre the chief financial officer (CFO) of Worldwide
Widget Manufacturing, Inc. The company manufactures and
sells widgets at factories in the United States and internationally.
Listed below are partial financial statements for Worldwide
Widget Manufacturing, Inc. Fill in the missing information in
each of the following financial statements. Answer spaces are
given below.
Worldwide Widget Manufacturing, Inc.
Balance Sheet as of December 31, 2015 and 2014
(in millions of dollars)
| 2015 | 2016 | 2015 | 2016 | ||
| Assets Current Assets: | Liabilities and Equity Current Liabilities: | ||||
| Cash and markatable securities | $427 | $322 | Accured wages and taxes | $309 | $257 |
| Accounts Receivable | a.? | 259 | Accounts payable | 381 | b.? |
| Inventory | 815 | 797 | Notes Payable | $492 | $421 |
| Total | $1,542 | $1,378 | Total | $1,182 | $997 |
| Fixed Assets: | Long-term debt: | $1,934 | c.? | ||
| Gross plant and equipment | d.? | $2,817 | Total | 3,116 | 2,956 |
| Less:depreciation | 368 | 254 | Stockholder's equity: | ||
| Net plant and equipment | $2,872 | $2,563 | Preferred stock ( 30 million shares) | $30 | $30 |
| Other long term assets | 521 | 487 | Common stock and paid in surplus (250 million shares) | 300 | e.? |
| Retained earnings | 1,489 | 1,142 | |||
| Total FA | f.? | $3,050 | Total Equity | $1,819 | $1,472 |
| Total Assets | $4,935 | $4,428 | Total liabilities and equity | $4,935 | $4,428 |
A. Accounts receivable for 2015_______300
B. Accounts payable for 2014_______319
C. Gross plant and equipment for 2015_______1959
D. Long-term debt for 2014_______3240
E. Common stock and paid-in surplus (250 million shares) for 2014_______300
F. Total FA for 2015_______3393
Worldwide Widget Manufacturing, Inc. Income Statement for Years Ending December 31, 2015 and 2014(in millions of dollars)
| 2015 | 2014 | |
| Net Sales | g. | $2018 |
| Less: Cost of Goods Sold | 753 | h.? |
| Gross Profits | $1,623 | $1,189 |
| Less: Other Operating Expense | 423 | 167 |
| Earnings before interest, taxes, depreciation, and amortization (EBITDA) | $1,200 | $1,022 |
| Less: Depreciation | 114 | 114 |
| Earning before interest and taxes (EBIT) | $1,086 | $908 |
| Less: Interest | i.? | 128 |
| Earnings:before Taxes (EBT) | $949 | $780 |
| Less:Taxes | j.? | 23 |
| Net Income | $664 | $546 |
| Less:Preferred stock dividends | 98 | 98 |
| Net income available to common stock holders | $566 | $448 |
| Less:Common stock dividends | 219 | 199 |
| Addition to retained earnings Per common share data: | $347 | $249 |
| Earnings per share (EPS) | k.? | $1.79 |
| Dividends per share (DPS) | $0.88 | l. ? |
| Book Value per share (BVPS) | m.? | $5.77 |
| Market Value per share (MVPS) | $23.97 | $22.47 |
g. Net sales for 2015_______2376
h. Less: Cost of goods sold for 2014_______829
i. Less: Interest for 2015_______137
j. Less: Taxes for 2015_______285
k. Earnings per share (EPS) for 2015_______1.88
l. Dividends per share (DPS) for 2014_______.73
m. Book value per share (BVPS) for 2015_______7.16
Worldwide Widget Manufacturing, Inc.
Statement of Cash Flows for Year Ending December 31, 2015
(in millions of dollars)â
| Section A: Cash Flows from operating activities | |
| Net Income | n.? |
| Additions (source of cash): Depreciation | 114 |
| Increase in accrued wages and taxes | o.? |
| Increase in accounts payable | 62 |
| Subtractions (use of cash): Increase in accounts receivable | -41 |
| Increase in inventory | p.? |
| Net Cash flow from operating activities | q.? |
| Section B: Cash Flows from investing activities subtractions: Increase in fixed assets | -$343 |
| Increase in other long-term assests | r.? |
| Net Cash flow from investing activities | s.? |
| Section C. Cash flows from financing activities Additions: Increase in notes payable | t.? |
| Increase in common and preferred stock | 0 |
| Subtractions: Decrease in long-term debt | -25 |
| Pay dividends | u.? |
| Net Cash flow from financing activities Section D. Net Change in cash and marketable securities | v.? $105 |
n. Net income_______664
o. Increase in accrued wages and taxes_______52
p. Increase in inventory_______18
q. Net cash flow from operating activities_______833
r. Increase in other long-term assets_______34
s. Net cash flow from investing activities_______-377
t. Increase in notes payable_______71
u. Pay dividends_______317
v. Net cash flow from financing activities_______-271
Worldwide Widget Manufacturing, Inc.
Statement of Retained Earnings as of December 31, 2015
(in millions of dollars)
| Balance of retained earnings, December 31,2014 | $1,142 | |
| Plus: Net income for 2015 | w.? | |
| Less: Cash dividends paid | 0 | 0 |
| Preferred stock | x.? | |
| Common Stock | 219 | |
| Total cash dividends paid | 317 | |
| Balance of retained earnings, December 31,2015 | $1,489 |
w. Plus: Net income for 2015 _______664
x. Preferred stock _______98
2. Youâll need to compare your companyâs ratios with the industryâs standards.
Worldwide Widget Manufacturing, Inc.
| Company | Industy | Comparison | |
| Current Ratio | 2.2 times | ||
| Quick Ratio | 1.1 times | ||
| Cash Ratio | 0.35 times | ||
| Inventory turnover | 2 times or 1 time | ||
| Days' sales in inventory | 135 days or 335 days | ||
| Average payment period | 110 days | ||
| Sales to working capital | 3 times | ||
| Total asset turnover | 0.6 times | ||
| Debt-to equity | 1.1 times | ||
| Profit margin | 16.5% | ||
| Gross profit margin | 48.13% | ||
| ROA | 8.78% | ||
| ROE | 19.45% | ||
| Divident payout | 32% |
A. Use the information found in Worldwide Widget Manufacturingâs financial statements
to calculate all of the listed financial ratios in the above table for your
company. Then, for each ratio, provide a comparison of the companyâs result
with the industry standards, indicating if your companyâs results are lower than,
higher than, slower than, or faster than the industry standards.
B. Calculate your companyâs internal and sustainable growth rates.
I just need help with the chart at the bottom. Here is all the information for the company.
Accounts receivable for 2015__$300____
Total current assets= cash and marketable securities + account rec + inventory
1,542=347+a/r+895
Accounts rec = $300
Accounts payable for 2014__$319_____
Total Current Liabilities = Accrued Wages and taxes + Accounts Payable + Notes Payable
997 = 257 + Accounts Payable + 421
Accounts Payable = $319
c. Gross plant and equipment for 2015_$3,159______
Net Plant and Equipment = Gross Plant and Equipment â Depreciation
2,872 = Gross Plant and Equipment â 287
Gross Plant and Equipment = $3,159
d. Long-term debt for 2014__$132_____
Total Debt = Long-term Debt + Current Liabilities
1,129 = Long-term Debt + 997
Long-term Debt = $132
e. Common stock and paid-in surplus (250 million shares) for 2014 $300
Total Equity = Preferred Stock + Common Stock and paid surplus + Retained Earnings
1,472 = 30 + Common Stock and paid surplus + 1,142
Common Stock and paid surplus = $300
f. Total FA for 2015 $3,393
Total FA = Net Plant and Equipment + Other long-term assets
Total FA = $2,872 + 521
Total FA = $3,393
g. Net sales for 2015_______
Net Sales â Cost of Goods Sold = Gross Profit
Net Sales â 987 = 1,396
Net Sales = $2,383
h. Less: Cost of goods sold for 2014_______
Net Sales â Cost of Goods Sold = Gross Profit
2,018 - Cost of Goods Sold = 1,189
Cost of Goods Sold = $829
i. Less: Interest for 2015_______
EBIT- Interest = EBT
1,086 â Interest = 949
Interest = $137
j. Less: Taxes for 2015_______
Net Income = EBT â Taxes
644 = 949 â Taxes
Taxes = $305
k. Earnings per share (EPS) for 2015_______
Earning per share for 2015 = Net Income available to Common Stockholders / No of Common Stocks
Earning per share =566 / 250
Earning per share = $2.27 per share
l. Dividends per share (DPS) for 2014_______
Dividend per share = Common stock Dividend/ No of Common Stocks
Dividend per share = 219/250
Dividend per share = $0.88 per share
m. Book value per share (BVPS) for 2015_______
Book value per share= total common stockholderâs equity/No of Common Stocks
Book value per share= 1,789/250
Book value per share= 7.16
n. Net income $664
o. Increase in accrued wages and taxes $309-$257= $52
p. Increase in inventory â(895-797)= $ -98
q. Net cash flow from operating activities 664+287+52+62-41-98=$926
r. Increase in other long-term assets â(521-487)= $-34
s. Net cash flow from investing activities -343-34=-377
t. Increase in notes payable 492-421= 71
u. Pay dividends 98+219= 317
v. Net cash flow from financing activities 71+147-317= -99
w. Plus: Net income for 2015 $664
x. Preferred stock $98
Worldwide Widget Manufacturing, Inc.
| Company | Industry | Comparison | |
| Current Ratio | 2.2 times | ||
| Quick Ratio | 1.1 times | ||
| Cash Ratio | 0.35 times | ||
| Inventory Turnover | 2 times or 1 time | ||
| Days' sales in inventory | 135 days or 335 days | ||
| Average payment period | 110 days | ||
| Sales to working capital | 3 times | ||
| total asset turnover | 0.6 times | ||
| debt to equity | 1.1 times | ||
| profit margin | 16.5% | ||
| gross profit margin | 48.13% | ||
| ROA | 8.78% | ||
| ROE | 19.45% | ||
| Dividend payout | 32% |
A. Use the information found in Worldwide Widget Manufacturingâs financial statements to calculate all of the listed financial ratios in the above table for your company. Then, for each ratio, provide a comparison of the companyâs result with the industry standards, indicating if your companyâs results are lower than, higher than, slower than, or faster than the industry standards.
B. Calculate your companyâs internal and sustainable growth rates.
Assume that you are nearing graduation and that you have appliedfor a job with a local bank. As part of the bankâs evaluationprocess, you have been asked to take an examination that coversseveral financial analysis techniques. The first section of thetest addresses time value of money analysis. See how you would doby answering the following questions:
a. Drawcash flow time lines for (1) a $100 lump-sum cash flow at the endof Year 2, (2) an ordinary annuity of $100 per year for threeyears, (3) an uneven cash flow stream of $50, $100, $75, and $50 atthe end of Years 0 through 3.
b. (1)What is the future value of an initial $100 after three years if itis invested in an account paying 10%annual interest?
(2) What is the present value of $100 to bereceived in three years if the appropriate interest rate is10%?
c. Wesometimes need to find how long it will take a sum of money (oranything else) to grow to some specified amount. For example, if acompanyâs sales are growing at a rate of 20%per year, approximatelyhow long will it take sales to triple?
d. Whatis the difference between an ordinary annuity and an annuity due?What type of annuity is shown in the following cash flow time line?How would you change it to the other type of annuity?
0 1 2 3
100 100 100
e. (1)What is the future value of a 3-year ordinary annuity of $100 ifthe appropriate interest rate is 10%?
(2) What is the present value of the annuity?
(3) What would the future and present values be ifthe annuity were an annuity due?
f. What is the present value of the following uneven cash flow stream?The appropriate interest rate is 10%, compounded annually.
0 1 2 3 4
100 300 300 150
g. Whatannual interest rate will cause $100 to grow to $125.97 in 3years?
h. (1)Will the future value be larger or smaller if we compound aninitial amount more often than annuallyâfor example, every 6months, or semiannuallyâholding the stated interest rateconstant? Why?
(2) Define the stated, or quoted, or simple, rate,(rSIMPLE), annual percentage rate (APR), the periodicrate (rPER), and the effective annual rate(rEAR).
(3) What is the effective annual rate for a simplerate of 10%, compounded semiannually? Compounded quarterly?Compounded daily?
(4) What is the future value of $100 after threeyears under 10%semiannual compounding? Quarterly compounding?
i. Will the effective annual rate ever be equal to the simple (quoted)rate? Explain.
j. (1) What is the value at the end of Year 3 of thefollowing cash flow stream if the quoted interest rate is 10%,compounded semiannually?
0 1 2 3
100 100 100
(2) What is the PV of the same stream?
(3) Is the stream an annuity?
(4) An important rule is that you should nevershow a simple rate on a time line or use it in calculations unlesswhat condition holds? (Hint: Think of annual compounding,when rSIMPLE = rEAR = rPER.) Whatwould be wrong with your answer to parts (1) and (2) if you usedthe simple rate 10%rather than the periodic raterSIMPLE/2 = 10%/2 = 5%?
k. (1)Construct an amortization schedule for a $1,000 loan that has a10%annual interest rate that is repaid in three equalinstallments.
(2) What is the annual interest expense for theborrower, and the annual interest income for the lender, duringYear 2?
l. Suppose on January 1 you deposit $100 in an account that pays asimple, or quoted, interest rate of 11.33463%, with interest added(compounded) daily. How much will you have in your account onOctober 1, or after 9 months?
m. Now suppose youleave your money in the bank for 21 months. Thus, on January 1 youdeposit $100 in an account that pays a 11.33463%compounded daily.How much will be in your account on October 1 of the followingyear?
n. Suppose someone offered to sell you a note that calls for a $1,000payment 15 months from today. The person offers to sell the notefor $850. You have $850 in a bank time deposit (savings instrument)that pays a 6.76649%simple rate with daily compounding, which is a7%effective annual interest rate; and you plan to leave this moneyin the bank unless you buy the note. The note is not riskyâthat is,you are sure it will be paid on schedule. Should you buy the note?Check the decision in three ways: (1) by comparing your futurevalue if you buy the note versus leaving your money in the bank,(2) by comparing the PV of the note with your current bankinvestment, and (3) by comparing the rEAR on the notewith that of the bank investment.
o. Suppose the note discussed in part n, above, costs $850, but callsfor five quarterly payments of $190 each, with the first paymentdue in 3 months rather than $1,000 at the end of 15 months. Wouldit be a good investment?
