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| June 4, 2016

Question
Use the following information to complete the income statement for Company A for the year ending December 31, 2013
(show work):
Income Statement Information
Revenue
Gross Margin
Selling General and Administrative (SG&A)
Research and Development (R&D)
Depreciation expense (D&A)
Interest Expense
Interest Income
Tax Rate
Securities Information
Weighted Average Shares (12/31/13)
A Warrants exercisable @ $2.00
B Warrants exercisable @ $3.00
Stock Price (12/31/13)
Complete the following Income Statement
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Revenue
Cost of Goods Sold
Gross Profit

$ 115,000,000
40.0%
21.0% of revenue
12.0% of revenue
$ 5,000,000
$ 5,000,000
$ 2,500,000
35%
10,000,000
2,200,000
2,500,000
$ 4.00

$ 115,000,000

Operating Expenses
SG&A
R&D
D&A
Operating Expenses Total

Points
1
1
1
1
1

Operating Income

5

Interest Expense, net

1

Pre Tax Income
Tax
Net Income

1
1
2

EPS Basic
EPS Diluted

5
10

Use this table (below) to help with your calculations
Diluted Share Calculations

Total Points

Basic
A warrants
B warrants
Total
Proceeds
A warrants
B warrants
Total Proceeds
Shares repurchased
Diluted shares used to calculate Diluted EPS

Total Score

60

30

$ 115,000,000

Problem 2 – 10 Points
Given the information below, calculate the Working Capital and Current Ratio
1
2
3
4
6
7
8
9
10
11
12

Cash and marketable securities Accounts Receivable (Gross) Accounts Payable Accumulated Depreciation
Inventory Other Current Assets Common Stock at Par Value Current portion of long term notes Other Current Liabilities Goodwill Long-Term debt –

$2,000,000
$3,000,000
$500,000
2,000,000
$4,000,000
$1,000,000
$100,000
$750,000
$250,000
$10,000,000
$4,500,000

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Working Capital
Current Ratio

5
5
10

Problem 3 – 20 Points

Given the following Information on ABC Corp, calculate the ratios below
ABC Corp. Year end statements

Balance Sheet 12/31/12

ASSETS
Cash
Accounts Recievable
Inventory
Total Current Assets

2012

LIABILITIES

Balance Sheet 12/31/13
2012

$2,000,000
2,000,000
3,000,000
7,000,000

Accounts Payable
Current portion of LTD
Accrued Liabilities
Total Current Liabilities

1,000,000
1,000,000
1,000,000
$3,000,000

Property Plant & Equipment, net

8,000,000

Long Term Debt (LTD)

Other Assets

2,000,000

Shareholder’s Equity

Total Assets

$17,000,000

Total Liabilities & Equity

ASSETS

2013

LIABILITIES

3,000,000
2,000,000
3,000,000
8,000,000

Accounts Payable
Current portion of LTD
Accrued Liabilities
Total Current Liabilities

1,000,000
1,000,000
1,000,000
3,000,000

9,000,000

Property Plant & Equipment, net

8,000,000

Long Term Debt (LTD)

9,000,000

5,000,000

Other Assets

2,000,000

Shareholder’s Equity

6,000,000

17,000,000

Total Assets

$18,000,000

Total Liabilities & Equity

Income Statement FY 12/31
2013

Revenue
Cost of Goods Sold
Gross Profit

$12,000,000
5,000,000
7,000,000

Selling General & Admin
Research and Development
Depreciation and Amortization
Total Operating expenses

2,400,000
1,500,000
1,500,000
5,400,000

Operating Profit

1,600,000

Interest Income
Interest Expense

100,000
700,000

Pre tax Profit
Tax (@35%)
Net income

1,000,000
350,000
$650,000

2013

Cash
Accounts Recievable
Inventory
Total Current Assets

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Current ratio 12/31/13
Accounts Receivable Turnover
Total Asset Turnover
Inventory Turnover
Liabilities to Equity 12/31/13
Revenue to Cash
Days revenue in Cash
Days Inventory
Return on Assets
Return on Equity

2
2
2
2
2
2
2
2
2
2
20

$18,000,000

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