Tuesday 1 August 2017

finc600 Week 7 Assignment - Homework Problems

finc600 Week 7 Assignment - Homework Problems
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Instructions
NAME:
To complete the homework assignments in the templates provided:
1. The question is provided for each problem. You may need to refer to your textbook for additional information
in a few cases.
2. You will enter the required information into the shaded cells.
3. The cells are coded:
a) T requires a text answer. Essay questions require references; use the textbook.

b) C requires a calculation, using Excel formulas or functions. You cannot perform the operation on a
calculator and then type the answer in the cell. You will enter the calculation in the cell, and only the final
answer will show in the cell. I will be able to review your calculation and correct, if necessary.
c) F requires a number only. In some problems, a Step 1 is added to help you solve the problem.
d) Formula requires a written formula, not the numbers. For example, the rate of return = [(1 + nominal)/
(1+inflation)]-1, or D (debt) + E (equity) = V (value).
4. Name your assignment file as "lastnamefirstinitial-FINC600-Week#", and submit by midnight ET, Day 7.

Instructions: Please refer to your book for assistance with your homework. Post your work in the worksheet. Highlight your final answer.
Problem 18-2

Table 18.11 (p. 484 and also provided below) gives abbreviated balance sheets and income statements for Estee Lauder Companies. Calculate the following ratios:
?

Answers:
a.

Ratio
Return on assets

Net Income/Average Total Assets

b.

Operating profit margin

EBIT/Sales

c.

Sales-to-assets ratio

Total Sales/ Total assets at start

1.92

d,

Inventory turnover

COGS/ Inventory at start

2.33

e.

Debtequity ratio

Long term debt at end/Total Shareholder equity at end

0.65

f.

Current ratio

Total current assets at the end/Total current liabilities at the end

1.64

Quick ratio

(Cash and Mkt Securities + Account receivable at the end)/Total current liabilities at the end

0.85

g.

Formula (in words)

Calculation
TIP: Interest rate - p. 468
0.104
0.103

Principles of Corporate Finance, Concise, 2nd Edition

Instructions: Please refer to your book for assistance with your homework. Post your work in the worksheet. Highlight your
final answer.

Problem 19-11

If a firm pays its bills with a 30-day delay, what fraction of its purchases will be paid in the current quarter? In the following
quarter? What if the delay is 60 days?

Step 1:
Worksheet - 30 day delay

2012 Qtr. 4
2013 Qtr.1
2013 Qtr.2
2013 Qtr.3
2013 Qtr.4

Month of
Purchase
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

Month for
Payment
T
T
T
T
T
T
T
T
T
T
T
T
T

Step 2:
Answers:
30 day delay - Payment made at end of 2013 Qtr1
Fraction from last quarter
F
Fraction from this quarter
F
Fraction for next quarter
F

60 day delay - Payment made at end of 2013 Qtr1
Fraction from last quarter
F
Fraction from this quarter
F
Fraction for next quarter
F

Worksheet - 60 day delay

2012 Qtr. 4
2013 Qtr.1
2013 Qtr.2
2013 Qtr.3
2013 Qtr.4

Month of
Purchase
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

Month for
Payment
T
T
 
Instructions: Please refer to your book for assistance with your homework. Post your work in the worksheet. Highlight
your final answer.


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