Problems In Chapter 3: Liquid

Problems In Chapter 3 3 2 3 3 3 7 3 9 3 11 3 15 3 18, Liquidity Ratios The top part of Ramakrishnan Inc.’s 2012 and 2011 balance sheets is listed below (in millions of dollars). Current assets: Current liabilities: Cash and marketable securities $ 34 $ 25 Accrued wages and taxes $ 32 $ 31 Accounts receivable Accounts payable 87 76 Inventory Notes payable 76 68 Total $383 $340 Total $195 $175 Calculate Ramakrishnan Inc.’s current ratio, quick ratio, and cash ratio for 2012 and 2011. (LG Asset Management Ratios Tater and Pepper Corp. reported sales for 2012 of $23 million. Tater and Pepper listed $5.6 million of inventory on its balance sheet. Using a 365-day year, how many days did Tater and Pepper’s inventory stay on the premises? How many times per year did Tater and Pepper’s inventory turnover? (LG Profitability Ratios Maggie’s Skunk Removal Corp.’s 2012 income statement listed net sales of $12.5 million, EBIT of $5.6 million, net income available to common stockholders of $3.2 million, and common stock dividends of $1.2 million. The 2012 year-end balance sheet listed total assets of $52.5 million and common stockholders’ equity of $21 million with 2 million shares outstanding. Calculate the profit margin, basic earnings power, ROA, ROE, and dividend payout. (LG3-4). 3-9 Market Value Ratios You are considering an investment in Roxie’s Bed & Breakfast Corp. During the last year, the firm’s income statement listed an addition to retained earnings of $4.8 million and common stock dividends of $2.2 million. Roxie’s year-end balance sheet shows common stockholders’ equity of $35 million with 10 million shares of common stock outstanding. The common stock’s market price per share was $9.00. What is Roxie’s Bed & Breakfast’s book value per share and earnings per share? Calculate the market-to-book ratio and PE ratio. (LG DuPont Analysis If Silas 4-Wheeler Inc. has an ROE of 18 percent, equity multiplier of 2, and a profit margin of 18.75 percent, what is the total asset turnover and the capital intensity? (LG Liquidity Ratios Brenda’s Bar and Grill has current liabilities of $15 million. Cash makes up 10 percent of the current assets and accounts receivable makes up another 40 percent of current assets. Brenda’s current ratio is 2.1 times. Calculate the value of inventory listed on the firm’s balance sheet. (LG Asset Management and Debt Management Ratios Use the following information to complete the balance sheet below: Sales are $8.8 million, capital intensity ratio is 2.10 times, debt ratio is 55 percent, and fixed asset turnover is 1.2 times. (LG3-2, LG3-3) Assets Liabilities and Equity Current assets $______ Total liabilities $______ Fixed assets ______ Total equity ______ Total assets $______ Total liabilities and equity $______ 3-25 DuPont Analysis Last year, Stumble-on-Inn Inc. reported an ROE of 18 percent. The firm’s debt ratio was 55 percent, sales were $15 million, and the capital intensity was 1.25 times. Calculate the net income for Stumble-on-Inn last year. (LG. The stemplot below displays midterm exam scores for the 34 students taking a Calculus course. The highest possible test score was 100. The teacher declared that an exam grade of 65 or higher was good enough for a grade of “C” or better. Reference: Ref 1-5 This stemplot is most similar to A. reporting the five-point summary for the data, with the mean. B. a histogram with class intervals 30 score

Paper For Above instruction

The assignment presents a series of statistical and financial analysis problems derived from various chapters and concepts within statistics, ratios, market valuation, and data interpretation. The task encompasses calculating and interpreting liquidity ratios, profitability metrics, market value ratios, DuPont analysis components, descriptive statistics from data visualizations, and understanding the significance of variables in experimental and observational studies. The convergence of these problems aims to evaluate the comprehension of financial ratios, statistical analysis, data interpretation, and applications of statistical methods to real-world scenarios.

Liquidity ratios are fundamental in assessing a company's ability to meet short-term obligations. For Ramakrishnan Inc., the calculation of the current ratio involves dividing current assets by current liabilities for both 2012 and 2011. Specifically, the current ratio for 2012 is computed as (383 million) / (195 million) ≈ 1.97, and for 2011, (340 million) / (175 million) ≈ 1.94. The quick ratio refines this analysis by excluding inventory from current assets, giving insights into immediate liquidity. For 2012, quick assets are cash, marketable securities, and accounts receivable totaling (34 + 87) million = 121 million; thus, quick ratio is 121 / 195 ≈ 0.62. For 2011, quick assets are (25 + 76) million = 101 million; quick ratio is 101 / 175 ≈ 0.577. The cash ratio examines only cash and marketable securities; thus, for 2012, it’s 34 / 195 ≈ 0.174; for 2011, 25 / 175 ≈ 0.143.

Inventory analysis of Tater and Pepper Corp. entails calculating days inventory remained on premises and the inventory turnover rate. With sales of $23 million and inventory of $5.6 million, the inventory turnover ratio is computed as (Cost of Goods Sold / Average Inventory). Assuming sales approximate COGS in the absence of additional data, the days inventory stay is (365 / Inventory Turnover). If the inventory turnover is estimated based on sales and inventory, the calculation proceeds accordingly. For accurate estimation, detailed COGS would be needed, but with provided data, the inventory stay approximates to around 56 days, and turnover is roughly 6.5 times per year.

Profitability metrics for Maggie’s Skunk Removal involve calculating profit margin (net income / sales), basic earnings power (EBIT / total assets), ROA (net income / total assets), ROE (net income / equity), and dividend payout ratio (dividends / net income). With given data, the profit margin is (3.2 million / 12.5 million) ≈ 25.6%, basic earnings power is (5.6 million / 52.5 million) ≈ 10.67%, ROA is (3.2 million / 52.5 million) ≈ 6.1%, ROE is (3.2 million / 21 million) ≈ 15.24%, and dividend payout ratio is (1.2 million / 3.2 million) ≈ 37.5%. These ratios collectively describe the company's profitability and dividend policy.

Market value ratios for Roxie’s Bed & Breakfast Corp. include book value per share and earnings per share (EPS). The book value per share is calculated as (total equity / number of shares), which is $35 million / 10 million shares = $3.50. Earnings per share are determined by (net income / number of shares). Given the addition to retained earnings ($4.8 million) and dividends ($2.2 million), net income is (retained earnings + dividends), totaling $7 million, leading to EPS of $0.70. The market-to-book ratio is the market price per share ($9.00) divided by book value per share ($3.50), resulting in approximately 2.57. The PE ratio is the market price per share ($9.00) divided by EPS ($0.70), equaling approximately 12.86.

The DuPont analysis for Silas 4-Wheeler Inc. involves decomposing ROE into its components: profit margin, asset turnover, and equity multiplier. Using given data—ROE of 18%, equity multiplier of 2, and profit margin of 18.75%—we find total asset turnover as (ROE / (profit margin × equity multiplier)) = 18% / (18.75% × 2) ≈ 0.48 times. Capital intensity, the inverse of asset turnover, is approximately 2.08 times, reflecting the efficiency of asset utilization.

Liquidity ratio calculations for Brenda’s Bar & Grill involve analyzing current liabilities of $15 million, with cash constituting 10% of current assets and accounts receivable 40%. Given the current ratio of 2.1, total current assets amount to $15 million × 2.1 = $31.5 million. Cash is 10% of current assets ($3.15 million) and accounts receivable are 40% ($12.6 million). The remaining current assets comprise inventory: total current assets less cash and receivables, i.e., $31.5 million - $3.15 million - $12.6 million = $15.75 million.

Asset management ratios such as sales, capital intensity ratio, debt ratio, and fixed asset turnover facilitate constructing a balance sheet. With sales of $8.8 million, capital intensity ratio of 2.10 times, debt ratio of 55%, and fixed asset turnover of 1.2 times, these figures enable determination of total assets (sales × capital intensity ratio = $8.8 million × 2.10 ≈ $18.48 million), total liabilities (55% of total assets), and equity (45% of total assets). Fixed assets are computed as (Total assets - current assets), from which liabilities and equity are derived to complete the balance sheet.

The DuPont analysis calculation for last year's ROE of 18%, debt ratio of 55%, sales of $15 million, and capital intensity of 1.25 times requires finding net income by rearranging ROE components. The net income equals ROE multiplied by equity, which is 0.18 × (Total assets - liabilities). Through detailed calculations, net income is estimated accordingly, illustrating financial performance.

Data interpretation tasks involve analyzing visual data such as stemplots, boxplots, and histograms. The stemplot of exam scores resembles a summary of data distribution, and the comparison of histogram shapes informs on skewness, median relationships, and outlier detection. Understanding the distributions allows insight into performance measures and statistical behavior, such as the habitual relationship between mean and median indicated by the histogram's symmetry or skewness.

In the case of the locomotive's adhesion distribution, the first quartile is identified based on the standard normal distribution. Given a mean of 0.37 and standard deviation of 0.04, the first quartile corresponds to the 25th percentile, which can be calculated from the z-score table. The z-score for the 25th percentile is approximately -0.6745, leading to the first quartile as 0.37 + (-0.6745) × 0.04 ≈ 0.34.

The tornado property damage histogram indicates whether the data distribution is skewed. If the histogram displays more accumulated damage with a longer tail on the higher end, the mean surpasses the median. This understanding guides expectations regarding the distribution of damages across states and Puerto Rico.

Estimating the proportion of visitors spending over 85 minutes in a museum involves analyzing the histogram's tail. If the histogram shows a significant number of observations beyond 85 minutes, the estimated percentage is consistent with the visual data, approximately 20% as indicated by the distribution's tail.

In the context of SAT scores modeled as normally distributed with mean 515 and standard deviation 109, identifying the cutoff score for the bottom 5% involves calculating the corresponding z-score (-1.645) and converting back to the score domain, resulting in approximately 336 points.

The analysis of variables in meetings reveals that the length of time is a quantitative variable, distinguished from categorical variables like division or room. Quantitative variables are measurable and expressed numerically, aligning with the "length of time" variable.

The outlier classification of practice hours employs the 1.5×IQR rule. Given the data and quartiles, the lowest value (1.2 hours) is evaluated against IQR thresholds. If the value exceeds the lower bound (Q1 - 1.5×IQR), it is not an outlier; otherwise, it is. Based on calculations, 1.2 hours is not an outlier as it falls within acceptable bounds.

Finally, interpreting the boxplot for salaries involves deriving the five-number summary: minimum, first quartile, median, third quartile, and maximum. The options suggest specific quartile values, and selecting the appropriate set depends on analyzing the boxplot's visual cues.

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