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Problem Set Ii Wk4

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Problem Set II
Jonathan Sestito
ACC 300
Nov 19, 2012
Arnold Gilbo

Problem Set II
P2-6A
| 2011 | 2012 | A) Earnings per share | $60,000/30,000Shares | = $2.00 | $70,000/33,000Shares | = $2.12 | B) Working Capital | ($20,000 + $62,000 + $73,000) – ($ 70,000) | = $85,000 | ($28,000 + $70,000 + $90,000) – ($75,000) | = $113,000 | C) Current Ratio | $155,000/$70,000 | = 2.2:1 | $188,000/$75,000 | = 2.5:1 | D) Debt to Total Assets Ratio | $160,000/$685,000 | = 23.4% | 155,000/760,000 | = 20.4% | E) Free Cash Flow | $56,000 – $38,000 – $15,000 | = $3,000 | $82,000 – $45,000 - $20,000 | = $17,000 |

F) The financial position and operating results for the Sievert Corporation are looking up from 2011 to 2012. The net earning and working capital have both increased. This shows the share holders that the profitability of the corporation has improved. Another high point is the debt to total assets ratio has gone down and this is good as it shows less owned to debt and more that can come in profit margins. This is shown in the increase of free cash flow.

P13-2A | 2012 | | Problem Work Through | Answer | A) Earnings Per Share | $300,000/$5 = $60,000(*)$290,000/$5 = $58,000(**)($60,000* + $58,000**)/2 = $59,000(***)$218,000/$59,000*** | = $3.69 | B) Return Per Share | $218,000/[($465,400+$603,400)/2] = $218,000/$534,400 | = 40.8% | C) Return on Common Stockholders’ Equity | $218,000/[($852,800+$1,026,900)/2] =$218,000/$939,850 | = 23.2% | D) Current Ratio | $377,900/$203,500 | = 1.86:1 | E) Receivables Turnover | $1,890,540/[($102,800+$117,800)/2] =$1,890,540/$110,300 | = 17.1 times | F) Average Collection Period | 365 days /17.1 | = 21.3 days | G) Inventory Turnover | $1,058,540/[($115,500+$126,000)/2 =$1,058,540/$120,750 | = 8.8 times | H) Days in Inventory | 365 days / 8.8 | = 41.5 days | I) Times Interest Earned |…...

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