Your firm successfully issued new debt last year, but the debt carries covenants. Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick (acid-test) ratio (Current Assets-Inventory)/Current Liabilities of 1.2. Your net income this year was $70. 3 million. Your cash is $10.3 million, your receivables are $7.9 million, and your inventory is $4.9 million. You have current liabilities of $19.3 million. What is the maximum dividend you could pay (in cash and in stock) this year and still comply with your covenants? The maximum dividend would be $ million (Round to one decimal place.)
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- Angelos Outlet used to report bad debt using the balance sheet method and is now switching to the income statement method. The percentage uncollectible will remain constant at 5%. Credit sales figures for 2019 were $866,000, and accounts receivable was $732,000. How much will Angelos Outlet report for 2019 bad debt estimation under the income statement method?Find below the financial data for Costa. Note that the firm has no amortization charges, it pays $100 in lease, and has $0 debt retired during the next 5 years (notes payable will be rolled over). Assume a 365-day year. COSTA. BALANCE SHEET (millions of dollars) Cash $ 140.0 Accounts payable $ 800.0 Accts. receivable 880.0 Notes payable 600.0 Inventories 1,320.0 Accruals 400.0 Total current assets $2,340.0 Total current liabilities $1,800.0 Long-term bonds 1,000.0 Total debt $2,800.0 Common stock 200.0 Retained earnings 1,000.0 Net plant & equip. 1,660.0 Total common equity $1,200.0 Total assets $4,000.0 Total liabilities & equity $4,000.0 OTHER DATA Sales = $ 6,000.0 Depreciation expense = $ 100.2 Operating income = $ 300.0 Interest expense = $ 96.0 Net income = $ 122.4 a. Calculate the ratios that you think would be useful in this analysis. b. Analyze the firm's: I. Liquidity position. II. Debt Management. c. Calculate the firm's ROE using Du-pont…ARG Inc. has an overdraft limit of $3.2 million and pays interest on its overdraft at a rate of 6 percent (6%) per year. The company currently has no long-term debt. Current liabilities consist of trade creditors and overdraft finance in each of the three years as follows: Based on the ATTACHED balance sheet and income statement and other financials, Calculate; 1. the interest cover 2. Credit days 3. Stock Days
- In the example below, we will use year-end assets. Bank A receives $70 in deposits at 5% and, together with 40 in equity, makes a loan of $90 at 7%. The remaining of assets is G-Bond. We will ignore taxes for the moment. NIM=Profit/Interest revenue Bank A Loan 7% $90 G-Bond 5% ? Deposits 5% $70 Equity $40 Total Assets $? Total Equity and Deposit $110 The amount of G-bond is $50 $70 $20 $40 $80 $60 $30 $109. On August 20, 2024, Madak Co. decides to invest excess cash of $2,900 by purchasing Wolf, Inc. bonds. At year-end, December 31, 2024, the market price of the bonds was $2,600. The K- investment is categorized as available-for-sale debt Joumalize the adjusting entry needed at December 31, 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table) Date 2024 Dec 31 Accounts and Explanation Debit Co CreditYou have been asked to analyze First Union Bank. You have only the following information on the bank at year-end 2021: Net income is $210, 000, total debt is $1.8 million, and the bank's debt ratio is 60 percent. What is First Union Bank's ROE for 2021? (Do not round intermediate calculations. Round your percentage answer to 2 decimal places. (e.g., 32.16))
- The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt; (b) the outstanding principal at the time indicated. Debt Principal Debt Payment Payment Interval Interest Rate Conversion Period Outstanding Principal After: $16,000 $1,128 1 month 5% semi-annually 7th payment (a) The number of payments required to amortize the debt is nothing. (Round up to the nearest integer.) (b) The outstanding principal is $nothing. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)In the past year, Blossom Corporation reported assets of $230229000. Liabilities reported on the balance sheet on the same date were reported at $69091655. Blossom issued a new note payable for cash during the year. The 8%, 5-year note was issued at a face value of $5008000. What is the company's debt to asset ratio after the refinance? O 29.37% 31.50% 32.18% O 30.01%On March 15, 2022, Red Company issued its financial statements. Its fiscal year ends at December 31, 2021. On January 11, 2022, Red issued 10,000 20-year bonds for $20,000,000. Face value per bond equals $1,000. Stated interest rate equals 5%. On March 2, 2022, due to the unexpected economic downturn, Red's accountant re-estimated the accounts receivable to have an ending balance of $15,250,000, which was previously recorded at $16,250,000 on December 31, 2021. Please discuss how the preceding subsequent events should be reflected in the 2021 financial statements.
- To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) 2. For both this year and last year A. Present the balance sheet in common-size format B. Present the income statement in common-size format down through net income Could you please help me answer Question 10, 2A, and 2B?To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) 2. For both this year and last year A. Present the balance sheet in common-size format B. Present the income statement in common-size format down through net income Could I please have somed help with Question 10 with a breakdown of the explanation?Sterling Inc. has two long-term notes outstanding. One is a five-year note for $50,000. An equal amount of principal must be repaid each year of the loan. The other is a seven-year note for $210,000. In the next calendar year, the company will pay $21,000 of the principal. What is total amount of the notes that will be reported as current liabilities on its balance sheet? Oa. $229,000 Ob. $31,000 Oc. $71,000 Od. $40,000