Change in the cash position of neva company

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Reference no: EM13200695

1. The following information is available about Marne Company for 2010. All sales are on credit.

Average cash and marketable securities = $1 million	EBIT = $2 million
Average inventory = $5 million	COGS = $15 million
Average accounts payable = $3 million	Long-term bonds = $8 million
Average accounts receivable = $3 million	Coupon rate on bonds = 10%
	Total Sales = $20 million

Find its:

(A) Inventory turnover ratio,

(B) Number of days sales outstanding,

(D) Current ratio

(E) Quick ratio,

3.2. Ider Corp expects to have $3.73 as earnings per share next year. The cost of equity for Ider is 16%, whereas its dividend yield is 4%. The price per share of Ider is $40. Find its dividend payout ratio. Find its current P/E ratio.

3.3. Indicate whether the following actions will increase, decrease, or make no change in the cash position of Neva Company. Give a short explanation in each case.

1. The firm collects payments from previous sales.

2. The company buys a piece of machinery by using long-term debt.

3. The company buys raw material for inventory on credit.

4. The company issues common stock.

5. The firm sells merchandise on credit.

6. The company declares a dividend.

7. The company purchases raw materials for inventory and pays in cash.

8. The firm pays interest on long-term debt.

9. This year's tax liability is increased.

10. The firm pays last year's taxes.

11. The firm uses retained earnings to buy marketable securities.

12. The corporation buys a piece of furniture using a short-term note.

13. The company increases the allowance for bad debts.

14. The company buys back its own stock.

15. The firm borrows on a short-term note.

16. The company pays for a previous purchase.

17. The company sells some merchandise for cash.

18. The firm increases the accumulated depreciation.

19. The firm gives away some merchandise to charity.

20. The firm receives an insurance payment after a fire loss.

4. Go to the Internet and find the following ratios for McDonald Corporation (MCD). Give the source of your information.

Ratio	Formula	Calculation	Ratio
Liquidity
Current
Quick, or Acid Test
Asset Management
Inventory Turnover
Days sales outstanding
Fixed assets turnover
Total assets turnover
Debt Management
Debt ratio
Interest coverage
Profitability
Net profit margin
Net return on assets
Return on common equity
Dividend payout ratio
Market Value
P-E ratio
Market/Book
Dividend yield

Reference no: EM13200695

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