Project #162078 - Finance

Business Tutors

Subject Business
Due By (Pacific Time) 01/07/2017 12:00 am

#1) Use the following industry average ratios, tonconstruct a pro forma balance sheet.  

data table

total asset turnover                                            2.5 times  

avg collection period (assume 365 day yr)             9.1 days

fixed asset turn over                                           5.2 times

 inventory turnover (based on cost of goods sold)       3.3 times current ratio                                                       2.4 times  

sales (all on credit)                                             $4.17 million

cost of goods sold                                            75% of sales

debt  ratio                                                       54%                            more information    

 cash    -------------           current liabilities---------------

inventory------------           long term debt-----------------

acc  receivable-----------          total liabilities--------------

net fixed assets-------------      common equity  ------------  

total---------------                     total-----------------

cost of goods sold is ---------(round to nearest dollar)  

cost of total assets-------------(round to nearest  dollar)  

fixed asset turn over----------- (round to nearest dollar)

fixed asets -------------------(round to nearest dollar)

acc. receivable -------------( round to nearest dollar)  

inventories-------------------(round to nearest dollar)

current ratio ----------------(round to nearest dollar)

current liabilities----------------(round to nearest dollar)

total liabilities------------------(round to nearest dollar)

debt ratio ---------------------(round to nearest dollar)

 #9)If  Pepperdine , Inc. return on equity is 16% and the management plans to retain 65% of earnings for investment purposes, what will be the firm's growth rate? (round to two dcimal places). solving the problem

 rate of growth

in dividends(g)= retention ratio(b)  x rate of teturn on equity (ROE)    

rate of growth in dividends =  0.65 X 0.16= 0.1040= 10.40%  #10)Gilliland Motor, Inc. paid a $3.61 dividend last yr. If gilliland's  return on equity is 18% and its retention  rate is 32%, what is the value of the common stock if the investors require a rate of return of 21% ? ( round to nearest cent).

 solving the problem  

rate of growth in dividends= retention ratio x rate of return on equity (ROE)  

 rate of growth in dividends =  0.32x 0.18=0.0576=5.76%

 D1= Do (1+g) = $3.61 (1+0.0576)= 3.61 (1.0576)=3.817=$3.82

vcs=D1/ rcs-g= 3.82/ 0.21-0.0576= 3.82/0.1524=25.07

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