What determines rate of cash flow in business?

8. Tre-Bien Bakeries generated net income of $233,412 this year. At year end, the company had

accounts receivables of $47,199, inventory of $63,781, and cash of $21,461. It also had accounts payables of $51,369, short-term notes payables of $11,417, and accrued taxes of $6,145. The net working capital of the firm is

 

9. Which of the following best represents cash flows to investors?

 

Week 2 Quiz

 

1. Which one of the following statements about trend analysis is NOT correct?

 

2. Coverage ratios: Sectors, Inc., has an EBIT of $7,221,643 and interest expense of $611,800. Its depreciation for the year is $1,434,500. What is its cash coverage ratio?

 

3. Multiples analysis: Turner Corp. has debt of $230 million and generated a net income of $121 million in the last fiscal year. In attempting to determine the total value of the firm, an investor identified a similar firm in Jacobs, Inc., an all-equity firm. This firm had 150 million shares outstanding, a share price of $14.25, and net income of $182 million. What is the total value of Turner Corp.? Round to the nearest million dollars

 

4. Coverage ratios, like times interest earned and cash coverage ratio, allow

 

5. Peer group analysis can be performed by

 

6. Efficiency ratio: If Viera, Inc., has an accounts receivable turnover of 3.9 times and net sales of $3,436,812, what is its level of receivables?

 

Week 3 Quiz

 

1.  You are provided the following working capital information for the Ridge Company:

 

Operating cycle: What is the operating cycle for Ridge Company?

 

2. The operating cycle

 

3. Ticktock Clocks sells 10,000 alarm clocks each year. If the total cost of placing an order is $65 and it costs $85 per year to carry the alarm clock in inventory, use the EOQ formula to calculate the optimal order size.

 

4. The asset substitution problem occurs when

 

5. Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the stock.

How much are your cash flows today?