Managerial Accounting /Finance (Coursework Sample)

Managerial Accounting /Finance
Candidate’s Name
Institution’s Name
Question one: Soaring Eagles Corp. has total current assetsof $11,160,000, current liabilities of $5,974,000 and a quick ratio of 0.89.What is its level of inventory? Answer: 5,840,000
Solution
Quick ratio = (current assets – inventories) / current liabilities
From the formula above
-Inventories= (quick ratio*current liabilities)-current Assets
= (0.89*5,974,000)-11,160,000
-Inventories = -5,843,140
Inventories level for Soaring Eagles Corp = 5,843,140
Question two: Boulder Mountain Ski Company has total assets of $434,400,000 and a debt ratio of 0.27. Calculate the company’s debt-to-equity ratio. Answer: 0.370
Solution
Debt-to-equity ratio = total liabilities / total shareholders' equity
And Debt ratio=total liabilities/ total assets
Therefore, total liabilities=0.27*434,400,000
=117,288,000
Shareholder’s equity=total assets-total liabilities
=434,400,000-117288000
=317,112,000
Debt to equity ratio= 117288000/317112000
=0.369863
Question three: The Timber Ridge Company has the following relationships:
Sales/Total assets = 3.64; ROA = 0.0900
What is Timber Ridge’s net profit margin? Your answer: 0.0247
Solution
ROA=Net profit margin*Assets turnover ratio
Therefore Net profit margin= ROA/Assets turnover ratio
=0.0900/3.64
=0.0247253
Question four: Sawaya Company had depreciation and amortization expenses of $522,311, interest expenses of $114,077, and an EBITDA of $1,521,087 for the year ended June 30, 2010. What is the Times Interest Earned for this company? Your answer: 2.910
Solution
Times Interest Earned= EBIT/Interest expense
= 1,521,087/522,311
=2.9122247

13.3 times


8.8 times


.6 times


None of the above

Question five: Archware Systems has total assets of $35.594billion, total debt of $9.678 billion, and net sales of $22.530 billion. Theirnet profit margin for the year was 0.21, while the operating profitmargin was 30 percent. What is Archware’s net income? (Answer needs to be stated in billions. For example: 2.83) Your Answer: 4.730
Solution
Net income= ROA*Total Assets
But ROA= Net profit margin*Assets turnover ratio
But Assets turnover ratio= Sales/total assets
=22.530/35.594
=0.6329718
Therefore, ROA= 0.21*0.6329718
=0.1329241
Net income= 0.1329241*35.594
=4.7313004 billion
Question six: Which one of the following stat...