Download Mas.m-1404. Financial Statements Analysis PDF

TitleMas.m-1404. Financial Statements Analysis
TagsEquity (Finance) Revenue Dividend Preferred Stock Financial Ratio
File Size117.0 KB
Total Pages22
Document Text Contents
Page 1

STRAIGHT PROBLEMS

1. FINANCING RATIOS. Yolanda Corporation and Pablo Company disclose the following data
on their balance sheet (in thousands):

Yolanda Corp. Pablo Corp.
Debt, 10% P 250,000 P 500,000
Shareholders’ equity 500,000 250,000
Total equity P 750,000 P 750,000
Earnings before interest and taxes P 375,000 P 375,000
Interest expense 25,000 50,000

Required:

a. For each company, compute the following
Ratios Formula Yolanda Corp. Pablo Corp.

a. Debt rate Total Debt/Total Assets 33% 67%
b. Debt-equity ratio Debt/SHE 0.50:1 2:1
c. Equity multiplier Total Equity/SHE 1.50x 3x
d. Times interest earned EBIT/Interest expense 15.00 7.50

b. Comment on the data you have computed.

2. INVESTING RATIOS. Char Corp. and Maine Co. revealed the following information on
their published financial statements for the 2013 business operations (in thousands):

Char Maine

Current assets P640,000 P225,000
Investments 56,000 500,000
Property, plant, and equipment 56,000 50,000
Intangibles 32,000 15,000
Other assets 16,000 10,000
Total assets P800,000 P800,000

Required : For each company, determine the ratio component of each asset over the total assets.
Comment on the data you computed

Char Maine
Current Assets 80% 28%
Investments 7 63
Property, Plant and Equipment 7 6
Intangibles 4 2
Other Assets 2 1
Total Assets 100% 100%

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