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04-09-2018

Product code: Accounts-AW696

 

FINANCE FOR MANAGERS

INSTRUCTIONS: Please show all work, and feel free to attach additional pages as necessary. Full credit will not be given for providing only an answer, even if the answer is correct. Homework assignments are due as specified in the course schedule.

 

2-1 Use the attached financial statements for Kohl’s Corporation to perform a complete ratio analysis using income statement and balance sheet data from the latest two years shown. Refer to the ratio summary presented in class.

2-2 Using the information below, recreate the financial statements for Imperial Products, Inc. on the attached worksheet. When completing the statement, you may round to the nearest $1.00; use the values exactly as presented below to prevent rounding errors. Please note this problem is separate from problem

2-1 above and uses none of the same data. Cash - $30,000

 

Total Revenues - $12,000,000

 

Fixed Asset Turnover Ratio - 4.8 times

 

Other expense - $500,000

 

Notes Payable - $75,000

 

Return on Assets - 11.005%

 

Average Collection Period - 18 days

 

Basic Earning Power - 20%

 

Common Stock $350,000

Inventory Turnover Ratio - 6 times

 

Cost of Sales - 62.5% of total revenues

 

Debt Ratio - .59984326 times

 

Acid Test Ratio - .625 times

 

Times Interest Earned Ratio - 4 times

 

Other Long-Term Debt - $450,000

 

Return on Equity – 27.5017235%

 

 

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Since, interest charged is least in option b) so that is the best option to pursue.

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