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Using the 2015 and 2016 financials for ICS, complete the following – show
calculations and/or numbers you used to derive your answer:
3. ICS wants to take around $400,000 of its cash and invest in marketable
securities. They anticipate receiving around $7.5% interest on their investment
and would like to have it held for 10 years. What will be the FV of this $400,000
investment?
4. ICS believes they will only gain a 6% return on their $400,000 investment.
Using the Rule of 72, how many years will it take to double their investment?
5. ICS plans on expanding their plant and will fund $2,000,000. Part of the
funding will come from cash, but the balance of $775,000 will be financed. The
interest rate will be 5% and ICS plans on borrowing the funds for 4 years.
Prepare a loan amortization schedule for the 4 years with 5% interest for the
$775,000 and assume making one payment per year. Show the schedule.
6. Using your 2015/2016 Income Statement and Balance Sheet, add a column
for percentage of total. Compute the percentages for each line item for the
financial statements. For the 2015 Income Statement, what is the percentage of
COGS as compared to total sales? Is this figure reasonable and what is COGS
and why is it important to a company?
7. Financial Ratios provide information to analyze a company’s
performance. Solve the following ratios for 2015 and 2016 using the Income
Statement and Balance sheets you prepared for ICS Manufacturing.
a.
Current Ratio – current assets/current liabilities
b. Quick Ratio – (current assets – inventories)/current
liabilities
c.
Cash Ratio – cash/current liabilities
d. Debt Ratio – total liabilities/total assets
e.
Cash Coverage Ratio – (EBIT + depreciation/interest
expense
f.
Inventory Turnover – cost of goods sold/inventory