Hi we weren't given an answer key for my review packet in my principles of finance class, I need to look over my answers before I take the final, the review packet didn't take any more than an hour and a half to two hours to do, is there anyone that can be available to do it before 2pm today so that I can check my answers? This file attached is not the review packet, it's on a website so I need to make it into a pdf and I can send it over but it's about the same, just a little longer
Topic 2 Practice Problems (Solutions below) 1. The MBJ Company has fixed assets of $609 Million, Total Equity of $318 Million, Current Liabilities of $ 177M, and Long-Term Debt of $340 Million. Given this information, MBJ has Current Assets that equal: 2. JBM Inc. has fixed assets of $609 Million, Current Assets of $318, Current Liabilities of $ 177M, and Long-Term Debt of $340 Million. Given this information, MBJ has Total Owner’s Equity that equal: 3. U&I Inc. has just reported sales of $807 Million, costs of $300 Million, depreciation of $19 Million and interest expense of $4.2 Million. What is the U&I’s earnings before interest and taxes? 4. POY Inc. has just reported sales of $775 Million, costs of goods sold of $250 Million, depreciation of $198 Million and interest expense of $60.2 Million. If the marginal tax rate is 35%, what is POY’s Net Income? GAR Corporation Balance Sheet – Current Year GAR Corporation Balance Sheet (in $Millions) Assets Liabilities Current Assets Cash Accounts Receivable Inventory Total Fixed Assets Net Plant and Equip. Total Assets Current Year Current Liabilities Accounts Payable Notes Payable Total Long-Term Debt Total Liabilities Current Year $301 211 1,008 $1,520 $3,584 $5,104 $219 301 $520 $1,514 $2,034 5. Using the balance sheet from GAR Corp. (above), what is the Total Equity of the company in millions? GAR Corporate Income Statement – Current Year GAR Corporation Current Year Income Statement (in $Millions) Sales Cost of Goods Sold Depreciation $2,899 1,005 251 Earnings Before Interest and Taxes Paid Interest $1,643 220 Earnings Before Taxes Taxes $1,423 484 Net Income $939 6. Using GAR Corporation’s income statement above, if the dividend payout ratio is 18%, what is the addition to retained earnings in millions? YOLF Corporate Income Statement – Current Year YOLF Corporation Current Year Income Statement (in $Millions) Sales Cost of Goods Sold Depreciation $1,994 684 188 Earnings Before Interest and Taxes Paid Interest $???? ???? Earnings Before Taxes Taxes $838 184 Net Income $654 7. Using the information above, what is YOLF’s interest expense? 8. Using the information above, what is YOLF’s EBIT? YOLF Corporation Balance Sheet – Current Year YOLF Corporation Balance Sheet (in $Millions) Assets Liabilities Current Assets Cash Accounts Receivable Inventory Total Fixed Assets Net Plant and Equip. Total Assets Current Year Current Liabilities Accounts Payable Notes Payable Total Long-Term Debt Total Liabilities Owners’ Equity Current Year $124 524 642 $????? $3,584 $????? $119 281 $??? $1,784 $???? ????? 9. What is YOLF’s current assets? 10. What is YOLF’s Total Assets? 11. What is YOLF’s current liabilities? 12. What is YOLF’s Total Liabilities? 13. What is YOLF’s Owners’ Equity? $ Topic 2 Solutions: 1. vThe MBJ Company has fixed assets of $609 Million, Total Equity of $318 Million, Current Liabilities of $ 177M, and Long-Term Debt of $340 Million. Given this information, MBJ has Current Assets that equal: Current Assets = $226 2. JBM Inc. has fixed assets of $609 Million, Current Assets of $318, Current Liabilities of $ 177M, and Long-Term Debt of $340 Million. Given this information, MBJ has Total Owner’s Equity that equal: Total Equity = $410 3. U&I Inc. has just reported sales of $807 Million, costs of $300 Million, depreciation of $19 Million and interest expense of $4.2 Million. What is the U&I’s earnings before interest and taxes? EBIT = $488 4. POY Inc. has just reported sales of $775 Million, costs of goods sold of $250 Million, depreciation of $198 Million and interest expense of $60.2 Million. If the marginal tax rate is 35%, what is POY’s Net Income? NI = $173.42 GAR Corporation Balance Sheet – Current Year GAR Corporation Balance Sheet (in $Millions) Assets Liabilities Current Assets Cash Accounts Receivable Inventory Total Fixed Assets Net Plant and Equip. Total Assets Current Year Current Liabilities Accounts Payable Notes Payable Total Long-Term Debt Total Liabilities Current Year $301 211 1,008 $1,520 $3,584 $5,104 $219 301 $520 $1,514 $2,034 5. Using the balance sheet from GAR Corp. (above), what is the Total Equity of the company in millions? Total Equity = $3,070 GAR Corporate Income Statement – Current Year GAR Corporation Current Year Income Statement (in $Millions) Sales Cost of Goods Sold Depreciation $2,899 1,005 251 Earnings Before Interest and Taxes Paid Interest $1,643 220 Earnings Before Taxes Taxes $1,423 484 Net Income $939 6. Using GAR Corporation’s income statement above, if the dividend payout ratio is 18%, what is the addition to retained earnings in millions? Retained Earnings = $769.98 YOLF Corporate Income Statement – Current Year YOLF Corporation Current Year Income Statement (in $Millions) Sales Cost of Goods Sold Depreciation $1,994 684 188 Earnings Before Interest and Taxes Paid Interest $???? ???? Earnings Before Taxes Taxes $838 184 Net Income $654 7. Using the information above, what is YOLF’s interest expense? Interest Expense = $284 8. Using the information above, what is YOLF’s EBIT? EBIT = $1122 YOLF Corporation Balance Sheet – Current Year YOLF Corporation Balance Sheet (in $Millions) Assets Liabilities Current Assets Cash Accounts Receivable Inventory Total Fixed Assets Net Plant and Equip. Total Assets Current Year Current Liabilities Accounts Payable Notes Payable Total Long-Term Debt Total Liabilities Owners’ Equity Current Year $124 524 642 $????? $3,584 $????? $119 281 $??? $1,784 $???? ????? 9. What is YOLF’s current assets? $1,290 10. What is YOLF’s Total Assets? $4,874 11. What is YOLF’s current liabilities? $400 12. What is YOLF’s Total Liabilities? $2,184 13. What is YOLF’s Owners’ Equity? $2,690