答案和详解如下： 1.The Erica Company has the following financial information: Balance Sheet
($ thousands)
| Assets | 2004
| 2003
| Cash & Cash Equiv. | 8,729 | 8,633 | Short-term Investments | 5,167 | 21 | Accounts Receivable | 791 | 685 | Inventories | 6,142 | 6,832 | Other Current Assets | 554 | 425 | Total Current Assets | 21,383 | 16,596 |
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| Property, Plant, and Equipment | 8,485 | 7,571 | Other Assets | 494 | 34 | Total Assets | 30,362 | 24,201 |
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| Liabilities |
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| Accounts Payable | 5,288 | 4,895 | Deferred Income Tax | 538 | 492 | Long-Term Debt | 4,821 | 4,962 | Total Liabilities | 10,647 | 10,349 |
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| Common Stock | 9,464 | 8,918 | Retained Earnings | 10,251 | 4,934 | Total Equity | 19,715 | 13,852 | Total Liabilities & Equity | 30,362 | 24,201 |
Income Statement
($ thousands) | |
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| 2004
| 2003
| | Sales | 9,889 | 8,128 | | Cost of Goods Sold | 4,691 | 4,173 | | Gross Profit | 5,198 | 3,955 | | Sales, Gen. & Admin. Exp. | 3,960 | 2,879 | | EBITDA | 1,238 | 1,076 | | Depreciation | 479 | 426 | | Operating Profit | 759 | 650 | | Interest Exp. | 59 | 55 | | Pretax Income | 700 | 595 | | Taxes | 210 | 178 | | Net Income | 490 | 417 | | Footnotes: §
The marginal tax rate is 40 percent. §
As of December 31, 2003, Erica Company had 18,650,000 shares outstanding with a share price of $10. The pretax yield on the debt is 7 percent. The debt trades very close to par. §
The risk-free rate is 3 percent and the market risk premium is 8 percent. Erica Company’s beta is 1.26. |
Which of the following ratios posted the biggest percentage change from year end 2003 to year end 2004? A) Debt/capital ratio. B) Return on equity. C) Return on assets. D) Financial leverage. The correct answer was A) The debt/capital ratio changed from 26.4% (4,962/(13,852+4,962)) to 19.6% (4,821/(19,715+4,821)), down 26%.
ROE changed from 3.0% (417/13,852) to 2.5% (490/19,715), down 17%.
ROA changed from 1.7% (417/24201) to 1.6% (490/30,362), down 6%.
Financial leverage changed from 1.747 (24,201/13,852) to 1.540 (30,362/19,715), down 12%. 2.If gross profits rise, operating profits are flat, and capital spending declines in 2005, which of the following ratios is most likely to rise? A) Inventory turnover. B) Financial leverage. C) Return on equity. D) Return on assets. The correct answer was A) If gross profits rise and operating profits are flat, the likely reasons are either higher sales or lower COGS with the most likely being an increase in sales greater than an increase in COGS. Higher sales would most likely lead to an increase in inventory turnover due to a related increase in COGS or lower average inventory on hand. Flat profits and minimal investment in new assets are likely to limit the growth of ROE and ROA. Without increases in the asset base or decreases in equity, financial leverage is not likely to rise. 3.2004 NOPAT is closest to: A) 455. B) 1,238. C) 750. D) 700. The correct answer was A) NOPAT = (sales - COGS - SGA - dep) x (1 - t)
= (9,889 - 4,691 - 3,960 - 479) x (1 - 0.40)
= 455 4.Erica Company’s 2004 weighted average cost of capital is closest to: A) 11.51%. B) 11.89%. C) 10.24%. D) 11.34%. The correct answer was D) Capital = debt + equity = 4,821 + 19,715 = 24,536
Equity weight = 19.715 / 24,536 = 80.4%
Debt weight = 1 – equity weight = 19.6%
kequity = rf + (rm – rf) β = 0.03 + 0.08 x 1.26 = 13.08%
The pretax required return on debt is 7%
Tax rate = 40% WACC = (80.4% * 13.08%) + (19.6% * 7% * [1 - 40%])
= 10.51% + 0.83% = 11.34% 5. §
EBIT = $615 million. §
Net debt = $600 million. §
Equity = $750 million. §
Marginal tax rate = 35%. §
Operating profit margin = 15%. §
Weighted average cost of capital = 10%. §
Required rate of return on equity = 12%. Assuming the above facts, EVA is closest to: A) $275 million. B) $250 million. C) $238 million. D) $265 million. The correct answer was D) NOPAT (Net operating profit after taxes) = $615 million x 0.65 = $400 million
EVA = NOPAT – (WACC * capital)
= $400 million – (10% * [$750 million + $600 million]) = $265 million A key to success here is determining the proper figure for capital. Net debt of $600 million combined with $750 million in equity represents total capital of $1,350 million. |
发表于 2008-5-21 11:10
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