财务报表分析-第07章习题答案

财务报表分析-第07章习题答案Chapter 7Long-Term Debt-Paying AbilityPROBLEMSPROBLEM 7-1Interestd Capitalize IncludingExpense, Interest Earnings Minority and Earnings,Equity Expense, Tax Expense,InterestExcluding Earnings, Recurring Earned Interets Times =Earnings before interest and tax:Net sales $1,079,143Cost of sales ( 792,755)Selling and administration ( 264,566)$ 21,822a. year per times 06.5311,4$822,21$Earned Interest Times ==b. Cash basis times interest earned:year per times 34.14311,4$822,61$311,4$000,40$822,21$==+PROBLEM 7-2Recurring Earnings Excluding InterestExpense, Tax Expense, Equity Earnings, a. Times Interest Earned = and Minority EarningsInterest Expense, IncludingCapitalized InterestIncome before income taxes $675Plus interest 60Adjusted income $735Interest expense $ 60Times Interest Earned = $735 = 12.25 times per year$60b.Rentals of Portion Interest Interest dCapitalize Including Expense, Interest Rentals of Portion Interest Earnings Minorityand Earnings, Equty Expense, Tax ExpenseInterest Excluding Earnings, Recurring Coverage Charge Fixed ++=Adjusted income from (part a) $7351/3 of operating lease payments(1/3 x $150) 50Adjusted income, including rentals $785Interest expense $ 601/3 of operating lease payments 50$110Fixed Charge Coverage = $785 = 7.14 times per year$110PROBLEM 7-3Recurring Earnings, Excluding Interest Expense, Tax Expense, Equity Earning,a. Times Interest Earned = and Minority Earnings________________Interest Expense, IncludingCapitalized InterestIncome before income taxes andextraordinary charges $36Plus interest 16(1) Adjusted income 52(2) Interest expense $16Times Interest Earned: (1) divided by (2) = 3.25 times per year Recurring Earnings, Excluding InterestExpense, Tax Expense, Equity Earnings,and Minority Earnings + Interest Portionb. Fixed Charge Coverage = Of Rentals______________________________Interest Expense, Including CapitalizedInterest + Interest Portion Of RentalsAdjusted income (part a) $ 521/3 of operating lease payments(1/3 x $60) 20(l) Adjusted income, including rentals $72Interest expense $161/3 of operating lease payments 20(2) Adjusted interest expense $36Fixed charge coverage: (1) divided by (2) = 2.00 times per yearPROBLEM 7-4a. Debt Ratio =41.2%$424,201$174,979Assets Total s Liabilitie Total == b. Debt/Equity Ratio = 70.2%$249,222$174,979Equity rs'Stockholde s Liabilitie Total ==c. Ratio of Total Debt to Tangible Net Worth =Total Liabilities = $174,979 = $174,979 = 70.9%Tangible Net Worth $249,222 - $2,324 $246,898d. Kaufman Company has financed over 41% of its assets by the useof funds from outside creditors. The Debt/Equity Ratio and theDebt to Tangible Net Worth Ratio are over 70%. Whether theseratios are reasonable depends upon the stability of earnings.PROBLEM 7-5a. Times Interest Earned:Times interest earned relates earnings before interest expense,tax, minority earnings, and equity income to interest expense.The higher this ratio, the better the interest coverage. Thetimes interest earned has improved materially in strengtheningthe long-term debt position. Considering that the debt ratioand the debt to tangible net worth have remained fairlyconstant, the probable reason for the improvement is anincrease in profits.The times interest earned only indicates the interest coverage.It is limited in that it does not consider other possiblefixed charges, and it does not indicate the proportion of thefirms resources that have come from debt.Debt Ratio:The debt ratio relates the total liabilities to the totalassets.The lower this ratio, the lower the proportion of assets thathave been financed by creditors.For Arodex Company, this ratio has been steady for the pastthree years. This ratio indicates that about 40% of the totalassets have been financed by creditors. For most firms, a 40%debt ratio would be considered to be reasonable.The debt ratio is limited in that it relates liabilities tothe book value of total assets. Many assets would have a valuegreater than book value. This tends to overstate the debtratio and, therefore, usually results in a conservative ratio.The debt ratio does not consider immediate profitability and, therefore, can be misleading as to the firm’s ability tohandle long-term debt.Debt to Tangible Net Worth:The debt to tangible net worth relates total liabilities toshareholders' equity less intangible assets. The lower thisratio, the lower the proportion of tangible assets that hasbeen financed by creditors.Arodex Company has had a stable ratio of approximately 81% for the past three years. This indicates that creditors havefinanced 81% as much as the shareholders after eliminatingintangibles from the shareholders contribution--for most firms, this would be considered to be reasonable. The debt totangible net worth ratio is more conservative than the debtratio because of the elimination of intangible items. It isalso conservative for the same reason that the debt ratio was conservative, in that book value is used for the assets andmany assets have a value greater than book value. The debt to tangible net worth ratio also does not consider immediateprofitability and, therefore, can be misleading as to thefirm's ability to handle long-term debt.Collective inferences one may draw from the ratios of Arodex, Company:Overall it appears that Arodex Company has a reasonable andimproving long-term debt position. The debt ratio and the debt to tangible net worth ratios indicate that the proportion of debt appears to be reasonable. The times interest earnedappears to be reasonable and improving.The stability of earnings and comparison with industry ratios will be important in reaching a conclusion on the long-termdebt position of Arodex Company.b.Ratios are based on past data. The future is what is important,and uncertainties of the future cannot be accuratelydetermined by ratios based upon past data.Ratios provide only one aspect of a firm's long-term debt-paying ability. Other information, such as information about management and products, is also important.A comparison of this firm's ratios with ratios of other firms in the same industry would be helpful in order to decide if theratios are reasonable.PROBLEM 7-6Recurring Earnings, Excluding Interesta. 1. Times Interest Expense, Tax Expense, Equity Earnings,Earned = and Minority Earnings_________________ Interest Expense, IncludingCapitalized Interest$162,000 = 8.1 times per year$ 20,0002. Debt Ratio = Total LiabilitiesTotal Assets$193,000 = 32.2%$600,0003. Debt/Equity Ratio = Total LiabilitiesStockholders' Equity$193,000 = 47.4%$407,0004. Debt to Tangible Net Worth Ratio = Total LiabilitiesTangible Net Worth$193,000 = 49.9%$407,000 - $20,000b. New asset structure for all plans:AssetsCurrent assets $226,000Property, plant, andequipment 554,000Intangibles 20,000Total assets $800,000Liabilities and EquityPlan ACurrent Liabilities $ 93,000 $200,000,000/100 =Long-term debt 100,000 2,000,000 sharesPreferred stock 250,000Common equity 357,000 No change in net income$800,000Plan BCurrent liabilities $ 93,000 $200,000,000/10 =Long-term debt 100,000 20,000,000 sharesPreferred stock 50,000Common stock 120,000Premium on common stock 300,000Retained earnings 137,000 No change in net income $800,000Plan CCurrent liabilities $ 93,000 Operating Income$162,000Long-term debt 300,000 Interest expense 52,000*Preferred stock 50,000 110,000Common equity 357,000 Taxes (40%) 44,000$800,000 Net Income $ 66,000* $20,000 + 16% ($200,000) = $52,0001. Recurring Earnings, Excluding Interest Expense, Times Interest Tax Expense, Equity Earnings, and Minority Earnings Earned = Interest Expense, Including Capitalized InterestPlan A Plan B Plan Ctimes 1.8000,20$000,162$= times 1.8000,20$000,162$= times 1.3000,52$000,162$=2. Debt = Total LiabilitiesRatio Total AssetsPlan A Plan B Plan C%1.24000,800$000,193$= %1.24000,800$000,193$= %1.49000,800$000,393$= 3. Debt/Equity Ratio =Equity rs'Stockholde s Liabilitie TotalPlan A Plan B Plan C%8.31000,607$000,193$= %8.31000,607$000,193$= %6.96000,407$000,393$= 4. Debt to Tangible Net Worth =WorthNet Tangible s Liabilitie TotalPlan A Plan B Plan C %9.32$20,000-$607,000$193,000= 329%$20,000-$607,000$193,000= 101.6%$20,000-$407,000$393,000=PROBLEM 7-7a. 1. Times Interest Earned =2004: $280,000 - $156,000= 7.29 times per year $17,0002003: $302,000 - $157,000= 9.06 times per year $16,0002002: $286,000 - $154,000= 8.80 times per year $15,0002001: $270,000 - $150,000= 8.28 times per year $14,5002000: $248,000 - $147,000= 4.39 times per year$23,000Recurring Earnings, ExcludingInterest, Tax Expense, EquityEarnings, and Minority Earnings +2. Fixed Charge Coverage = Interest Portion of RentalsInterest Expense, IncludingCapitalized Interest + InterestPortion of Rentals2004: $280,000 - $156,000 + $10,000 = 4.96 times per year $17,000 + $10,0002003: $302,000 - $157,000 + $9,000 = 6.16 times per year $16,000 + $9,0002002: $286,000 - $154,000 + $9,500 = 5.78 times per year $15,000 + $9,5002001: $270,000 - $150,000 + $10,000 = 5.31 times per year $14,500 + $10,0002000: $248,000 - $147,000 + $9,000 = 3.44 times per year $23,000 + $9,0003. Debt Ratio = Total LiabilitiesTotal Assets2004: $88,000 + $170,000 = 46.07%$560,0002003: $89,500 + $168,000 = 46.48%$554,0002002: $90,500 + $165,000 = 46.14%$553,8002001: $90,000 + $164,000 = 46.31%$548,5002000: $91,500 + $262,000 = 65.83%$537,000财务报表分析-第07章习题答案4. Debt/Equity = Total LiabilitiesShareholders' Equity2004: $88,000 + $170,000 = 85.43%$302,0002003: $89,500 + $168,000 = 86.85%$296,5002002: $90,500 + $165,000 = 85.65%$298,3002001: $90,000 + $164,000 = 86.25%$294,5002000: $91,500 + $262,000 = 192.64%$183,5005. Debt to Tangible Net Worth = Total LiabilitiesShareholders' Equity -Intangible Assets2004: $88,000 + $170,000 = 91.49%$302,000 - $20,0002003: $89,500 + $168,000 = 92.46%$296,500 - $18,0002002: $90,500 + $165,000 = 90.83%$298,300 - $17,0002001: $90,000 + $164,000 = 91.20%$294,500 - $16,0002000: $91,500 + $262,000 = 209.79%$183,500 - $15,000b. Both the times interest earned and the fixed charge coverageare good. The times interest earned is substantially betterthan the fixed charge coverage because of the operating leases.Both of these ratios materially declined in 2004.The debt ratio, debt/equity, and debt to tangible net worth materially improved between 2000 and 2001. During the period 2001-2004, these ratios were relatively steady and appeared to be good. The debt to tangible net worth ratio is not as good as the debt/equity ratio because of the influence ofintangibles.。