财务计价小练习.doc

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1、_Chapter 11-Problem One: Information contained in Financial Statements List ten different items you would expect to find in an average annual report to shareholders.2-Problem Two: Identify Industries Below are selected ratios for three companies which operate in three different industries: Discount

2、Retail Store, Drug and Utility.Identify which industry each of the companies A, B and C operate in. Give two reasons for each of your selections.3-.Problem Three: Balance Sheet Reconstruction You want to prepare the balance sheet for Usher Inc. as of December 31, 2005. Use the following information.

3、 All information pertains to fiscal 2005 unless otherwise stated.4-.Problem Four: Valuation of Equity Assets and liabilities at the end of 2005 for Tripod Inc. are $4,970K and $2,220K respectively. Net income and dividends for fiscal 2005 were $ 500K and $200K, respectively. Tripod has 100 shares ou

4、tstanding as of 12/31/05.Net income is expected to grow at 10% for the next three years (2006 - 2008). The dividend payout ratio is expected to remain at 2005 level for next three years. After 2005 abnormal earnings are expected to be zero. Cost of debt is 8% and cost of equity is 15%.What would you

5、 be prepared to pay per share for Tripod stock at the end of fiscal 2005, using the accounting based equity valuation formula?.5-Problem Five: Equity Valuation In the table below is selected information for Sprigue Company.All figures are in thousands and represent expectations of the future.a. Calc

6、ulate the expected free cash flow to equity for the years 2005 to 2009.b. Explain the expected changes in debt levels over the five yearsChapter 2Problem Two: Earnings Management Earnings management can be defined as the purposeful intervention by management in the earnings process, usually to satis

7、fy selfish objectives (Schipper, 1989).Earnings management techniques can be separated into those that are cosmetic (without cash flow consequences) and those that are real (with cash flow consequences).The management of a company wishes to increase earnings this period.List three cosmetic and three

8、 real techniques that can be used to achieve this objective and explain why they will achieve the objective.Problem Six: Fair Value Accounting ABC Co. starts its business raising $110,000 in cash; $60,000 from issuing equity and $50,000 from issuing 6% bonds at par. ABC used the whole amount of cash

9、 to buy a building, which it rents out for $10,000 per year. Given below is the opening balance sheet of ABC Co. for the first year of operations.At the end of Year 1, the building is valued at $150,000. Also, the market value of bonds has fallen to $49,000. Assume the useful life of the building is

10、 30 years and its salvage value is $50,000 at the end of that period. The rental income is received on the last day of the year. Interest on bonds is also paid on this day.Prepare the year-end balance sheet and income statement of ABC Co. based on Fair value. Compare the historical and fair values a

11、t year-end.Chapter 31-Problem One: Leases Compare the effects of operating leases as compared to capitalized leases, in the first year of a lease, on the following items listed. Explain your answer.1. EBIT 2. Net Income 3. Return on Assets (levered) 4. Cash flow from Operations 5. Current Ratio2-.Pr

12、oblem Two: Liabilities not recorded on balance sheet You are considering purchasing a company - assets, liabilities, warts and all. You are aware that sometimes liabilities do not always show up on the balance sheet. Give five examples of liabilities that may not be explicitly recognized on the bala

13、nce sheet, being sure to explain why they are liabilities.3-.Problem Five: The effect of leases on financial ratios Some financial information about Retail Inc. and Store Inc. is given below:You are asked to analyze these companies and specifically analyze the impact of the leases on different finan

14、cial ratios.a. Compute the present value of the lease obligations for Retail Inc. using an annual interest rate of 8%. You should assume all payments are made at the end of the year, and all payments after year X6 are equal to the payment in year X6.b. Compute the present value of the lease obligati

15、ons for Stores Inc. using an annual interest rate of 8%. You should assume all payments are made at the end of the year, and all payments after year X6 are equal to the payment in year X6.c. Compute the total liabilities to asset ratio and the long-term debt to assets ratio for Retail Inc. for the e

16、nd of year X1.d. Compute the total liabilities to asset ratio and the long-term debt to assets ratio for Stores Inc for the end of year X1.e. Repeat c and d and compute the total liabilities to asset ratio and the long-term debt to assets ratio for both companies for the end of year X1 assuming the

17、companies capitalize the leases.Chapter4Problem Two: Adjusting from LIFO to FIFO Below are selected numbers extracted from Harnischfegers Year X2 financial statements (numbers are in thousands).Inventories valued using the LIFO method represented approximately 56% and 80% of consolidated inventories

18、 at October 31, X2 and X1, respectively.a. Calculate for Year X2:i) the gross margin percentageii) the current ratioiii) inventory turnoveriv) Estimate the following numbers if Harnischfeger used FIFO for all inventories:v) the gross marginvi) the current ratiovii) nventory turnoverb. Compare your a

19、nswers in part a) and b) and comment.Problem Five: Fixed Assets Below is selected information taken from the balance sheet of LongLi Corporation as of 12/31/06.From the operating section of the statement of cash flows, you determine that the depreciation expense for the year was $2,000 and loss on s

20、ales of assets was $5,000. The investing section reveals that the company purchased equipment for $14,000 and sold equipment for $2,000.In the footnotes to the financial statements, the company states:At the beginning of 2006, we determined that the useful life of our assets was higher than original

21、ly believed. Accordingly we have increased the useful life from 10 years to 15 years in 2006.a. What was the gross book value of the equipment that was sold?b. What was the net book value of the equipment that was sold?c. With respect to the change in the useful lives of the assets:i. What is the ef

22、fect on 2005s financial statements?ii. What is the effect on 2006s financial statements?3 . Problem Six: Plant, Property and Equipment You are analyzing two companies that operate in the same industry. They are both growing capital-intensive manufacturing companies, Guerr Corp. and Filk Corp. A dili

23、gent reading of their annual reports reveals the following:You know that these accounting differences will affect the comparability of the two companys financial results.Consider each of the above items (depreciation method, average depreciable lives and leases) separately and determine all other th

24、ings being equal, whether the following ratios will be higher, lower or the same for Guerr when compared to Filk. Explain your answers.i. Observed P/E ratioii. Price to Free Cash flowiii. Price to Book ValueProblem chpter 595.Problem One: Equity method versus cost method Wilde Corporation owns 30% o

25、f the outstanding stock of Bernie Inc. Bernie recorded net income of $10M and paid dividends of $3M in 2006. For each of the following ratios, state the effect (higher, lower or no effect) that the use of the equity method would have on Wildes financial ratios compared to the use of the cost method

26、in 2006. Explain your answers.i. Gross marginii. Total Asset turnoveriii. Cash flow from operations to current liabilitiesiv. Debt to Equity98.Problem Four: Pooling vs. Purchase Accounting You are analyzing the financial statements of ABC Corp. at the end of fiscal 2006. You notice that during the y

27、ear, they made a major acquisition. Nowhere in the annual report does it state whether ABC used purchase or pooling-of-interests accounting for this acquisition. It made no other acquisitions during the year, and there were no disposals of any lines of business.How would you determine whether purchase accounting or pooling-of-interests accounting had been used. Give three ways. Explain fully.6_