# Financial Management Stakeholders Equity & Assets Calculations

Question 1 (10 Points)

Alesha, Inc., has current assets of $5,400, net fixed assets of $23,700, current liabilities of

$4,700, and long-term debt of $11,500. (Do not round intermediate calculations.)

What is the value of the shareholders’ equity account for this firm? How much is net working

capital?

Question 2 (10 Points)

Gia, Inc., has sales of $671,000, costs of $333,000, depreciation expense of $77,000, interest

expense of $48,500, and a tax rate of 24 percent. (Do not round intermediate calculations.)

What is the net income for the firm? Suppose the company paid out $44,500 in cash dividends.

What is the addition to retained earnings?

Question 3 (10 Points)

Klingon Cruisers, Inc., purchased new cloaking machinery four years ago for $4 million. The

machinery can be sold to the Romulans today for $3.6 million. Klingon’s current balance sheet

shows net fixed assets of $2 million, current liabilities of $700,000, and net working capital of

$216,000. If all the current accounts were liquidated today, the company would receive $1.03

million cash.

a) What is the book value of Klingon’s assets today? (Do not round intermediate calculations and

enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

b) What is Klingon’s market value of assets? (Do not round intermediate calculations and enter

your answer in dollars, not millions of dollars, e.g., 1,234,567.)

2

2

Question 4 (20 Points)

Schwert Corp. shows the following information on its 2019 income statement: sales = $206,000;

costs = $123,000; other expenses = $7,900; depreciation expense = $14,000; interest expense =

$13,100; taxes = $16,800; dividends = $10,000. In addition, you’re told that the firm issued

$4,600 in new equity during 2019 and redeemed $3,100 in outstanding long-term debt. (Do not

round intermediate calculations.)

a) What is the 2019 operating cash flow?

b) What is the 2019 cash flow to creditors?

c) What is the 2019 cash flow to stockholders?

d) If net fixed assets increased by $22,000 during the year, what was the addition to net working

capital (NWC)?

Question 5 (10 Points)

Synovec Company has a debt-equity ratio of .76. Return on assets is 8.0 percent, and total equity

is $885,000.

a) What is the equity multiplier? (Do not round intermediate calculations and round your answer

to 2 decimal places, e.g., 32.16.)

b) What is the return on equity? (Do not round intermediate calculations and enter your answer as

a percent rounded to 2 decimal places, e.g., 32.16.)

c) What is the net income? (Do not round intermediate calculations.)

Question 6 (10 Points)

Y3K, Inc., has sales of $6,239, total assets of $2,855, and a debt-equity ratio of 1.30. If its return

on equity is 15 percent, what is its net income? (Do not round intermediate calculations and

round your answer to 2 decimal places, e.g., 32.16.)

3

3

Question 7 (10 Points)

Assume the following ratios are constant:

What is the sustainable growth rate? (Do not round intermediate calculations and enter your

answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Question 8 (20 Points)

The most recent financial statements for Williamson, Inc., are shown here (assuming no income

taxes):

Assets and costs are proportional to sales; debt and equity are not. No dividends are paid. Next

year’s sales are projected to be $7,150.

What is the external financing needed? (Do not round intermediate calculations and round your

answer to the nearest whole dollar amount, e.g., 32.)

Alesha, Inc., has current assets of $5,400, net fixed assets of $23,700, current liabilities of

$4,700, and long-term debt of $11,500. (Do not round intermediate calculations.)

What is the value of the shareholders’ equity account for this firm? How much is net working

capital?

Question 2 (10 Points)

Gia, Inc., has sales of $671,000, costs of $333,000, depreciation expense of $77,000, interest

expense of $48,500, and a tax rate of 24 percent. (Do not round intermediate calculations.)

What is the net income for the firm? Suppose the company paid out $44,500 in cash dividends.

What is the addition to retained earnings?

Question 3 (10 Points)

Klingon Cruisers, Inc., purchased new cloaking machinery four years ago for $4 million. The

machinery can be sold to the Romulans today for $3.6 million. Klingon’s current balance sheet

shows net fixed assets of $2 million, current liabilities of $700,000, and net working capital of

$216,000. If all the current accounts were liquidated today, the company would receive $1.03

million cash.

a) What is the book value of Klingon’s assets today? (Do not round intermediate calculations and

enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

b) What is Klingon’s market value of assets? (Do not round intermediate calculations and enter

your answer in dollars, not millions of dollars, e.g., 1,234,567.)

2

2

Question 4 (20 Points)

Schwert Corp. shows the following information on its 2019 income statement: sales = $206,000;

costs = $123,000; other expenses = $7,900; depreciation expense = $14,000; interest expense =

$13,100; taxes = $16,800; dividends = $10,000. In addition, you’re told that the firm issued

$4,600 in new equity during 2019 and redeemed $3,100 in outstanding long-term debt. (Do not

round intermediate calculations.)

a) What is the 2019 operating cash flow?

b) What is the 2019 cash flow to creditors?

c) What is the 2019 cash flow to stockholders?

d) If net fixed assets increased by $22,000 during the year, what was the addition to net working

capital (NWC)?

Question 5 (10 Points)

Synovec Company has a debt-equity ratio of .76. Return on assets is 8.0 percent, and total equity

is $885,000.

a) What is the equity multiplier? (Do not round intermediate calculations and round your answer

to 2 decimal places, e.g., 32.16.)

b) What is the return on equity? (Do not round intermediate calculations and enter your answer as

a percent rounded to 2 decimal places, e.g., 32.16.)

c) What is the net income? (Do not round intermediate calculations.)

Question 6 (10 Points)

Y3K, Inc., has sales of $6,239, total assets of $2,855, and a debt-equity ratio of 1.30. If its return

on equity is 15 percent, what is its net income? (Do not round intermediate calculations and

round your answer to 2 decimal places, e.g., 32.16.)

3

3

Question 7 (10 Points)

Assume the following ratios are constant:

What is the sustainable growth rate? (Do not round intermediate calculations and enter your

answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Question 8 (20 Points)

The most recent financial statements for Williamson, Inc., are shown here (assuming no income

taxes):

Assets and costs are proportional to sales; debt and equity are not. No dividends are paid. Next

year’s sales are projected to be $7,150.

What is the external financing needed? (Do not round intermediate calculations and round your

answer to the nearest whole dollar amount, e.g., 32.)