FI 393 Lecture Notes - Lecture 28: Retained Earnings, Current Liability, Accounts Payable

6 views3 pages

harlequinsalmon729

18 Jul 2019

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

A report that shows how items that affect the balance sheet and income statement affect the firm"s cash flows. Shows how much cash the firm began the year with, how much cash it ended up with, and what it did to increase or decrease its cash. Statement of stockholders" equity the amount of equity the stockholders had at the start of the year, the items that increased or decreased equity, and the equity at the end of the year. Stockholders" equity = paid-in capital + retained earnings. Financial statements reports what has actually happened to its assets, earnings, and dividends over the past few years. They represent the cumulative total of all earnings kept by the company during its life. Current assets - (current liabilities - notes payable) A report summarizing a firm"s revenues, expenses, and profits during a reporting period, generally a quarter or a year. Earnings from operations before interest and taxes (i. e. ebit)

Related Questions

1.)Company ABC has sales of $1,650,000, cost of goods sold of$600,000, EBIT of $450,000, interest expense of $70,000, and a taxrate of 27%. If the company paid $57,000 in dividends what is theaddition to retained earnings.

2.)At the beginning of the year, a firm had current assets of$121,306 and current liabilities of $124,509. At the end of theyear, the current assets were $122,418 and the current liabilitieswere $103,718. What is the change in net working capital?

3.)

Use the Income Statement and Balance Sheet below to calculatethe companies free cash flow.

Income Statement	2017
Net Sales	675
Cost of goods sold	210
Depreciation	50
EBIT	415
Interest Paid	15
EBT	400
Taxes (30%)	120
Net Income	280
Dividends	105
Addition to Retained Earnings	175

Assets	2016	2017	Liabilities and Shareholders equity	2016	2017
Current Assets			Current Liabilities
Cash	100	125	Accounts Payable	200	250
Accounts Receivable	250	350	Notes Payable	150	225
Inventory	400	375
Total Current Assets	750	850	Total Current Liabilities	350	475
			Long term debt	300	250
Fixed Assets			Stockholders equity
PPE	1500	1700	Common stock	300	300
Accumulated Depreciation	400	450	Retained earnings	900	1075
Net PPE	1100	1250	Total Shareholderâs Equity	1200	1375
Total Assets	1850	2100	Total Liabilities & Equity	1850	2100

4.)A firm has net working capital of $900. Long-term debt is$4,200, total assets are $8,000, and fixed assets are $4,300. Whatis the amount of the total liabilities?

beigedeer979

Create a Sources and Uses Statement using this Balance Sheet:


BALANCE SHEETS
(In millions)

	June 30, 2016	June 30, 2015
Assets
Current assets:
Cash and cash equivalents	$6,510	$5,595
Short-term investments (including securities loaned of $204 and $75)	106,730	90,931
Total cash, cash equivalents, and short-term investments	113,240	96,526
Accounts receivable, net of allowance for doubtful accounts of $426 and $335	18,277	17,908
Inventories	2,251	2,902
Other	5,892	5,461
Total current assets	139,660	122,797
Property and equipment, net of accumulated depreciation of $19,800 and $17,606	18,356	14,731
Equity and other investments	10,431	12,053
Goodwill	17,872	16,939
Intangible assets, net	3,733	4,835
Other long-term assets	3,642	3,117
Total assets	$193,694	$174,472

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$6,898	$6,591
Short-term debt	12,904	4,985
Current portion of long-term debt	0	2,499
Accrued compensation	5,264	5,096
Income taxes	580	606
Short-term unearned revenue	27,468	23,223
Securities lending payable	294	92
Other	5,949	6,555
Total current liabilities	59,357	49,647
Long-term debt	40,783	27,808
Long-term unearned revenue	6,441	2,095
Deferred income taxes	1,476	1,295
Other long-term liabilities	13,640	13,544
Total liabilities	121,697	94,389
Commitments and contingencies
Stockholders' equity:
Common stock and paid-in capital - shares authorized 24,000; outstanding 7,808 and 8,027	68,178	68,465
Retained earnings	2,282	9,096
Accumulated other comprehensive income	1,537	2,522
Total stockholders' equity	71,997	80,083
Total liabilities and stockholders' equity	$193,694	$174,472

harlequinimpala927

Please help with question D

Last year Rattner Robotics had $5 million of operating income. Its depreciation expense was $1 million, its interest expense was $1 million, and its corporate tax rate was 40%. At year-end, it had $14 million in current asset, $3 million in accounts payable, $1 million in (expense) accrualâs, $2 million in notes payable, and $15 million in net plant and equipment. Rattner had no other current liabilities. Assume that Rattner's only noncash item was depreciation.

a. What was the company's net income?

b. What was its net operating working capitals (NOWC)?

c. What was its net working capital (NWC)?

d. Rattner had $12 million in net plant and equipment the prior year. Its net operating working capital has remained constant over time. What is the company's free cash flow (FCF) for the year that just ended?

e. Rattner had 500,000 common shares outstanding and the common stock amount on the balance sheet is $5 million. The company has not issued or repurchased common stock during last years. Last year's balance in retained earnings was $12 million and the firm paid out dividends of $1.2 million during the year. Develop Rattner's end-of-year Statement of StockHolders Equity.

What was the company's net income?

Company's net income = (operating income - interest expense)*(1-tax rate)

(5 -1)*(1-40%)

Company's net income = $ 2.40 Milliion

What was its net operating working capitals (NOWC)?

Net operating working capitals = current asset - accounts payable - accruals

14 - 3 - 1

Net operating working capitals = $ 10 Million

What was its net working capital (NWC)?

Net working capital = current asset - Current liabilty

14 - (3 + 1 + 2)

Net working capital = $ 8 Million

Rattner had $12 million in net plant and equipment the prior year. Its net operating working capital has remained constant over time. What is the company's free cash flow (FCF) for the year that just ended?

End of Year Statement of Stockholders Equity
Particulars
Common Stock		5,000,000.00
Retained earnings		10,800,000.00

Total Stockholders Equity		15,800,000.00


	Retained earnings =last years earnings-dividend paid
	12,000,000.00-1,200,000.00=10,800,000.00

redfish597

FI 393 Lecture Notes - Lecture 28: Retained Earnings, Current Liability, Accounts Payable

Document Summary

Get access

Related Documents

FI 393 Lecture Notes - Lecture 30: Current Liability, Accounts Payable, Promissory Note

FI 393 Lecture Notes - Lecture 32: Reserve Requirement, Accounts Payable, Cash Flow

FI 393 Lecture Notes - Lecture 25: Sole Proprietorship, Capital Structure, Reserve Requirement

Related Questions