Module 4 Critical Thinking Assignment

Module 4 Critical Thinking Assignment

Ratio Analysis and Time Value of Money

Don't use plagiarized sources. Get Your Custom Essay on
Module 4 Critical Thinking Assignment
Just from $13/Page
Order Essay

Problem 4-1

RATIO ANALYSIS (Chapter 4)
The Balance Sheet and the Income Statement for XYZ Manufacturing Corporation are as follows:
DATA (All amounts in SAR unless otherwise indicated, and all sales are on credit.)
Balance Sheet:
Cash400,000
Acct/Rec725,000
Inventories650,000
Current assets1,775,000
Net fixed assets690,000
Total assets2,465,000
Accts/Pay265,000
Accrued expenses310,000
Short-term N/P80,000
Current liabilities655,000
Long-term debt950,000
Owner’s equity860,000
Total liabilities and owners’ equity2,465,000
Income Statement:
Net sales9,550,000
COGS4,866,000
Gross profit4,684,000
Operating expenses2,984,000
Net operating income1,700,000
Interest expense45,000
EBT1,655,000
Income taxes662,000
Net income993,000
Calculate the following ratios:
Current ratio = 
Acid test ratio = 
Debt ratio = 
Operating profit margin = 
Operating return on assets = 
Return on equity = 
Times interest earned = 
Average collection period = 
Inventory turnover = 
Fixed asset turnover = 
Total asset turnover = 
Problem 4-2
MARKET-VALUE RATIOS (Chapter 4)
Jeddah Industries has a price earning ratio of 11X.
a. If Jeddah’s earnings per share are SAR 42.00, what is the price per share of Jeddah’s stock?
b. Using the price per share you calculated in part a, determine the price / book ratio if Jeddah’s equity-book value is 17.40.
Solution
a. Price per share 
b. Price/book ratio 
Problem 4-3
FUTURE VALUE CALCULATIONS (Chapter 5)
To what amount will the following investments accumulate?
Annual
Amount Invested (SAR)InterestYears
80,0005%5
60,0004%12
35,50012%4
97,0007%15
Problem 4-4
PRESENT VALUE CALCULATIONS (Chapter 5)
What is the present value of the following future amounts?
Annual
Future Amount (SAR)InterestYears
900,0005%5
478,0004%12
279,00012%4
440,0007%15
Problem 4-5
COMPOUND ANNUITY CALCULATIONS (Chapter 5)
What is the accumulated future sum of each of the following Ordinary annuities?
Annual
Present Amount (SAR)InterestYears
20,0005%5
42,0004%12
8,00012%4
19,5007%15
Problem 4-6
PRESENT VALUE OF ANNUITY CALCULATIONS (Chapter 5)
What is the present value of each of the following Ordinary annuities?
Annual
Present Amount (SAR)InterestYears
20,00012%5
42,0005%12
8,0004%4
19,5002%5
Problem 4-7
COMPOUND INTEREST AT NON-ANNUAL RATES (Chapter 5)
Given the annual interest rates below, and the compounding period indicated,
calculate the FUTURE VALUE for each item.
AnnualCompounding
Present Amount (SAR)InterestYearsPeriod
20,0006%5Semi-annually
42,0004%12Quarterly
8,00012%4Monthly

Calculator

Calculate the price of your paper

Total price:$26
Our features

We've got everything to become your favourite writing service

Need a better grade?
We've got you covered.

Order your paper
Live Chat+1(978) 822-0999EmailWhatsApp