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11. Goal of the Firm [LO2] Evaluate the following statement:
Managers should not focus on the current stock value because doing so
will lead to an overemphasis on short-term profits at the expense of
long-term profits.
Ch. 2: Questions 4 & 9 (Questions and Problems section): Microsoft®
Excel® template provided for Problem 4.
Building an Income Statement [LO1] Billy’s Exterminators, Inc., has
sales of $817,000, costs of $343,000, depreciation expense of $51,000,
interest expense of $38,000, and a tax rate of 35 percent. What is the net
income for this firm?
3. Dividends and Retained Earnings [LO1] Suppose the firm in
Problem 2 paid out $95,000 in cash dividends. What is the addition to
retained earnings?
4. Per-Share Earnings and Dividends [LO1] Suppose the firm in
Problem 3 had 90,000 shares of common stock outstanding. What is the
earnings per share, or EPS, figure? What is the dividends per share
figure?
9. Calculating Additions to NWC [LO4] The 2014 balance sheet of
Steelo, Inc., showed current assets of $4,630 and current liabilities of
$2,190. The 2015 balance sheet showed current assets of $5,180 and
current liabilities of $2,830. What was the company’s 2015 change in
net working capital, or NWC?
• Ch. 3: Questions 4 & 7 (Question and Problems section)
4. Calculating Inventory Turnover [LO2] The Green Corporation has
ending inventory of $417,381, and cost of goods sold for the year just
ended was $4,682,715. What is the inventory turnover? The days’ sales
in inventory? How long on average did a unit of inventory sit on the
shelf before it was sold?