Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Consider a company with sales that are initially equal to 650 million, and grow at a rate of 8% per quarter. The company’s profit margin is 7%. Inventory must be in place a quarter before the goods are sold. All goods are paid in cash.

8. Question 8 Consider a company with sales that are initially equal to 650 million, and grow at a rate of 8% per quarter. The company’s profit margin is 7%….

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

For the following question you will need the cash flow statement below. 2015 2016 Earnings 2590 Depreciation 1200 1260 Increase in working capital -200 -670 Cash flow from operations 3590 Cash flow from investments -2500 Cash flow from financing 230 Net change in cash 1320 Cash flow from operations in 2016 is _______.

3. Question 3 For the following question you will need the cash flow statement below.   2015 2016 Earnings 2590   Depreciation 1200 1260 Increase in working capital -200 -670…

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

If the growth rate of sales goes up with no change in costs, the company will generate higher cash flow during the year.

10. Question 10 Consider a company with sales that are initially equal to 650 million and grow at a rate of 8% per quarter. The company’s profit margin is 7%….

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Consider the following income statement and balance sheet to answer the question below. Revenue 270000 COGS 230000 SG&A 20000 EBIT 20000 Cash 4000 Short term debt 15000 Inventory 20000 Accounts payable 19000 Receivables 25000 ______________ _____ Current Assets 49000 Current Liabilities 34000 The company’s cash conversion cycle is ________.

7. Question 7 Consider the following income statement and balance sheet to answer the question below. Revenue 270000     COGS 230000     SG&A 20000     EBIT 20000…

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Consider the following income statement and balance sheet to answer the question below. Revenue 270000 COGS 230000 SG&A 20000 EBIT 20000 Cash 4000 Short term debt 15000 Inventory 20000 Accounts payable 19000 Receivables 25000 ______________ _____ Current Assets 49000 Current Liabilities 34000 Days in inventory are ________.

6. Question 6 Consider the following income statement and balance sheet to answer the question below. Revenue 270000     COGS 230000     SG&A 20000     EBIT 20000…

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Consider the following income statement and balance sheet to answer the question below. Revenue 270000 COGS 230000 SG&A 20000 EBIT 20000 Cash 4000 Short term debt 15000 Inventory 20000 Accounts payable 19000 Receivables 25000 ______________ _____ Current Assets 49000 Current Liabilities 34000 The company’s collection period is _______.

5. Question 5 Consider the following income statement and balance sheet to answer the question below. Revenue 270000     COGS 230000     SG&A 20000     EBIT 20000…

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Suppose that interest expenses in 2016 will be 5% of total debt in 2015, and total debt in 2015 is equal to 30,000. The income tax rate is the same as in 2015. Forecast earnings in 2016 and choose the correct answer.

2. Question 2 Consider the following income statement to answer the question below.   2015 2016 Revenue 60000 66000 COGS 42000   SG&A 13000   EBIT 5000   Interest expense…

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Suppose the company’s total uses of cash are equal to 150 in the first quarter, 90 in the second quarter, and 95 in the third quarter. The company starts the year with no cash reserves. Which option best describes the firm’s short term financial situation?

12. Question 12 Consider the following example of the effect of seasonality in sales on cash flows.     First Quarter Second Quarter Third Quarter Fourth Quarter Receivables at start…

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Consider the following example of the effect of seasonality in sales on cash flows. First Quarter Second Quarter Third Quarter Fourth Quarter Receivables at start of period 45 Forecast sales 90 85 130 155 Collections: -Sales in current period (70%) 63 -Sales from last period (30%) 45 –Total collections 108 Receivables at end of period 27 Percentage sales collected this period 70% Total collections in the second quarter are ________.

11. Question 11 Consider the following example of the effect of seasonality in sales on cash flows.   First Quarter Second Quarter Third Quarter Fourth Quarter Receivables at start of…

Corporate Finance I: Measuring and Promoting Value Creation | Online Course Support

Suppose the company is planning a capital expenditure of -6,000 in 2016. Assume also that this company does not pay dividends. Can the company finance this capital expenditure without issuing new external finance?

4. Question 4 For the following question you will need the cash flow statement below.   2015 2016 Earnings 2590   Depreciation 1200 1260 Increase in working capital -200 -670…