FINC2101

Assignment 1
Due Sunday 1 October , 2017

Question (1)
The income statement for the year ended December 31, 2000, the balance sheets for December
31, 2000 and 1999 and the statement of retained earnings for the year ended December 31, 2000
for Technia Inc. are given here.

Prepare the Statement of Cash Flows for the company.

Income Statement
Technica, Inc.
For the year ended December 31,2000

Sales revenues $600,000

Less: Cost of Goods Sold 460,000
Gross Profits $140,000
Less: Operating Expenses

General and administrative $30,000

expenses

Depreciation expense 30,000

Total Operating Expenses 60,000
Operating profits $80,000
Less: Interest Expense 10,000
Net Profits before taxes $70,000
Less: taxes 27,100
Earnings available for $42,900
common stock holder
Earnings per share $2.15
 Balance Sheet
Technica,Inc.
December 31
Assets 2000 1999
Cash $15,000 16,000
Marketable Securities 7,200 8,000
Accounts Receivable 34,100 42,200
Inventories 82,000 50,000
Total Current Assets 138,300 116,200
Land and Buildings 150,000 150,000
Machinery and equipment1 200,000 190,000
Furniture and fixtures 54,000 50,000
Other 11,000 10,000
Total gross fixed assets 415,000 400,000
Less: Accumulated 145,000 115,000
depreciation
Net fixed Assets 270,000 285,000
Total Assets $408,300 $401,200

Liabilities and Stock

Holders Equity
Accounts Payable 57,000 49,000
Notes Payable 13,000 16,000
Accruals 5,000 6,000
Total Current Liabilities 75,000 71,000
Long term debt 150,000 160,000
Stock holders equity
Common stock equity (shares 110,200 120,000
outstanding:19,500 in 2000,
and 20,000 in 1999)
Retained Earnings 73,100 50,200
Total Stock holders equity 183,300 170,200
Total Liabilities and Owner 408,300 401,200
Equity

Statement of Retained Earnings

Technica, Inc.
For the year ended December 31,2000
Retained Earnings balance (Jan 1, 2000) 50,200
Plus: Net profits after taxes (for 2000) 42,900
Less: Cash dividend (paid during 2000) (20,000)
Retained Earnings balance (Dec 31, 2000) $73,100
Question (2)
Philagem, Inc., ended 2009 with a net profit before taxes of $218,000. The company is subject to
a 40% tax rate and must pay $32,000 in preferred stock dividends before distributing any
earnings on the 85,000 shares of common stock currently outstanding.
a. Calculate the companys 2009 Earnings Per Share (EPS).
b. If the firm paid common stock dividend of $0.8 per share how many dollars will
go to retained earnings.

Question (3)
The purpose of this question is to familiarize you with real corporations financial statements. You
are to select a US listed public corporation whose name starts with the first letter of your name.
The following are the requirements of this exercise:

a. Go to finance.yahoo.com or Morningstar.and go to the page with financial information on

your company. What is the current stock price of the company? What is its market
capitalization (price x number of shares outstanding)? Obtain the financial statements of the
firm.
b. From the balance sheet of the company, what is the value of the following:
a. Total Assets
b. Total Liabilities
c. Retained Earnings
d. Long Term Debt
c. From the income statement, what is the value of the following:
a. Total Sales
b. Gross Profit
c. Total Operating Expenses
d. Net Income
e. Tax rate that the company pays
d. From the statement of cash flows, what is the value of the following:
a. Net change in Cash and marketable securities
b. Cash provided by operating activities
e. Using all of the previous values and others:
a. Analyze the companys liquidity, profitability, debt, activity and market ratios.
Use two financial ratios under each category.
b. Select five of the financial ratios and compare them to the industry averages