Stone Cold Incorporated
Balance Sheet: 12/31/04
Assets20042003
Cash and Marketable Securities1080
Accounts Receivable375315
Inventories 615 415
Total Current Assets1,000810
Net plant and equipment1,000 870
TOTAL ASSETS2,0001,680
Liabilities and Equity20042003
Accounts Payable6040
Notes Payable14060
Accruals 110 130
Total Current Liabilities310230
Long Term Bonds 754 580
TOTAL DEBT1,064810
Preferred Stock4040
Common Stock130130
Retained earnings766700
TOTAL COMMON EQUITY896830
TOTAL LIABILITIES AND EQUITY2,0001,680
Income Statement: 12/31/0420042003
Net Sales3,2002,850
Operating Costs (excludes Dep/Amortization)2,700 2,497
EBITDA 500 353
Depreciation10090
Amortization 0 0
Depreciation and Amortization 100 90
EBIT400263
Less Interest 88 60
EBT312203
Taxes (40%)124.8 81.2
NET INCOME (before Preferred Dividends)187.2121.8
Preferred Dividends 4 4
NET INCOME 183.2 117.8
Common Dividends11753
Addition to Retained Earnings66.264.8
61.Refer to Stone Cold. For 2004, what was the average collection period for the firm in 2004?
a.6.84 days
b.8.77 days
c.42.77 days
d.51.22 days
62.Refer to Stone Cold. For 2004, what was the total asset turnover for 2004?
a.0.80
b.1.20
c.1.40
d.1.60
63.Refer to Stone Cold. For 2004, what was the times interest earned ratio for 2004?
a.2.13
b.2.77
c.3.55
d.4.55
64.What was the free cash flow in 2004 for Stone Cold Incorporated?
a.-$55.20
b.-$44.80
c.$145.20
d.$215.00
65.Consider the following financial information for Classic City Ice Cream Corporation:
2004 Financial Data
Net Income$ 50,000
Total Assets$300,000
Total Shareholder Equity$200,000
Net Sales$100,000
What is the total asset turnover for the firm in 2004?
a.16.67%
b.25.00%
c.33.33%
d.40.00%
66.Consider the following financial information for Classic City Ice Cream Corporation:
2004 Financial Data
Net Income$ ???,???
Total Assets$250,000
Total Shareholder Equity$200,000
Net Sales$100,000
If the return on equity is 20%, what was Net Income for 2004?
a.$25,000
b.$40,000
c.$50,000
d.$65,000
Titans Electronics
Titans Electronics reports the following data for the past year:
EBIT$1,000,000# of Common shares400,000
Net Income$ 480,000Total Dividends Paid $120,000
Interest Paid$ 200,000Current Assets $ 80,000
Total Assets$6,000,000Current Liabilities$ 60,000
Market Price of
Common equity
$ 20
67.What is the current P/E ratio for the Titans?
a.8.00
b.10.00
c.15.50
d.16.67
68.Titans Electronics is applying for a new line of credit from their banking partner. To issue the credit, the bank requires the following cutoffs for certain financial ratios:
TIE ratio of 4.25 Current Ratio of 1.50 ROA of 5%.
What is a likely response from the bank to the application?
a.The bank will have reservations, as the TIE ratio does not meet requirements.
b.The bank will have concerns, as the current ratio does not meet requirements.
c.The bank will have concerns, as the ROA is not high enough.
d.The bank will have concerns, as two or more of the requirements are not met.
Exhibit 2-1
The tax schedule for corporate income is shown in the table below:
Taxable Income OverNot OverTax Rate
$ 0 $ 50,000 15.00%
50,000 75,000 25.00%
75,000 100,000 34.00%
100,000 335,000 39.00%
335,000 500,000 34.00%
10,000,000 15,000,00035.00%
15,000,000 18,333,33338.00%
18,333,333...............35.00%
69.Refer to Exhibit 2-1. Pale Rider Corporation reports taxable income of $500,000 in 2004. What was their tax liability for the year?
a.$56,100
b.$91,650
c.$170,000
d.$200,000
70.Refer to Exhibit 2-1. Pale Rider Corporation reports taxable income of $500,000 in 2004. What was the average tax rate they paid for the year?
a.23.25%
b.25.00%
c.29.40%
d.34.00%
