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发表于 2009-6-30 15:34
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63. Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
Which of the following best describes taxes payable?
A. Total liability for current and future taxes.
B. Tax return liability resulting from current period taxable income.
C. Actual cash outflow for income taxes including payments (refunds) for other years.
Answer: B
“Income Taxes,” Elbie Antonites, CFA, and Michael Broihahn, CFA
2009 Modular Level I, Volume 3, p. 385
Study Session: 9-37-a
Explain the differences between accounting profit and taxable income, and define key terms including deferred tax assets, deferred tax liabilities, valuation allowance, taxes payable, and income tax expense.
Taxes payable is the current liability resulting from the current period taxable income based on the company’s tax rate and the portion of its income that is subject to income taxes under the tax laws of the jurisdiction.
64. Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
A company is considering issuing either a straight coupon bond or a coupon bond with warrants attached. The proceeds from either issue would be the same. If the firm issues the bond with warrants attached instead of the straight coupon bond, which of the following ratios will most likely be lower for the bond with warrants?
A. Return on assets.
B. Debt to equity ratio
C. Interest coverage ratio.
Answer: B
“Long-term Liabilities and Leases,” Elizabeth Gordon and R. Elaine Henry, CFA
2009 Modular Level I, Volume 3, pp. 440-442
Study Session 9-38-e
Describe two types of debt with equity features (convertible debt and debt with warrants) and calculate the effect of issuance of such instruments on a company’s debt ratios.
The portion of the proceeds attributable to the warrants would be classified as equity, thus the portion classified as a liability would be smaller (lower). Therefore the debtto- equity ratio will be lower, for the bonds with warrants.
EBIT would be the same regardless of financing method; the coupon on the bond with warrants attached would be lower if the two issues provided the same proceeds, so the interest coverage would be higher for a bond with warrants attached.
Since interest expense would be lower for a bond with warrants attached, Net Income would be higher and ROA would be higher.
65. Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
An analyst is forecasting EPS for a company. She prepares the following common sized data from its recent annual report and estimates sales for 2009.
| |
2009 forecast |
2008 actual |
2007 actual |
|
Sales $ millions |
2,250.0 |
2,150.0 |
1,990.0 |
|
Sales as % of sales |
|
100.00% |
100.00% |
|
Cost of goods sold |
|
45.00% |
45.00% |
|
Operating Expenses |
|
40.00% |
40.00% |
|
Interest expense |
|
3.72% |
4.02% |
|
Restructuring expense |
|
|
7.20% |
|
 re-tax margin |
|
11.28% |
3.78% |
|
Taxes (35%) |
|
3.95% |
1.32% |
|
Net Income |
|
7.33% |
2.46% |
The capital structure of the company has not changed and the company has no shortterm interest bearing debt outstanding. The projected net income (in $ millions) for 2009 is closest to:
A. 162.8.
B. 164.9.
C. 167.4.
Answer: C
“Understanding the Income Statement,” Thomas R. Robinson, CFA, Jan Hendrik van Greuning, CFA, R. Elaine Henry, CFA, and Michael A. Broihahn, CFA
2009 Modular Level I, Volume 3, pp.175-177
“Financial Statement Analysis: Applications,” Thomas R. Robinson, CFA, Jan Hennie van Greuning, CFA, Elaine Henry, CFA, and Michael A. Broihahn, CFA
2009 Modular Level I, Volume 3, pp.583-587
Study Session: 8-32-j, 10-42-b
Evaluate a company’s financial performance using common-size income statements and financial ratios based on the income statement.
Prepare a basic projection of a company’s future net income and cash flow.
The cost of goods sold and operating expenses are constant over the two-year period and they can reasonably be used to forecast 2009. Interest expense is declining as a percent of sales, implying it is a fixed cost. Conversion into dollars for each year shows what interest expense has been; 2008 =$80 (3.72% x 2,150); 2007=$80 (4.02 x 1,990) and that would be a reasonable projected amount to use. The restructuring charge should not be included as it is a non-recurring item. The tax rate, 35%, is given.
Sales $2,250.00
COGS (45%) 1,012.50
Operating expenses (40%) 900.00
Interest expense 80.00
Pretax margin 257.50
Tax (35%) 90.1
Net Income 167.40 |
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