I need help with 3 practice problems related to 1) Working


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I need help with 3 practice problems related to 1) Working Capital, Current Ratio, Quick Assets, Acid-Test Ratio 2) Reading Publically Available Financial Statements 3) Financial analysis measures and interpretation. Please complete in excel spreadsheets ( I uploaded the problems and directions) Assessment 7.pdf Assessment 7 Complete three problems: Problem 1 focuses on working capital and quick ratio, and Problem 2 involves reading public financial statements. Problem 3 is a comprehensive problem in which you will bring together various financial analysis measures and interpret their meaning in order to draw conclusions. Problem 1: Working Capital, Current Ratio, Quick Assets, Acid-Test Ratio The Sanchez Corporation is preparing its 2012 balance sheet. The company records show the following selected amounts at the end of the accounting period, December 31, 2012: Problem 1: Sanchez Corporation Selected Amounts Account Dollar Amount Total assets $600,000 Total noncurrent assets $350,000 Liabilities Dollar Amount Notes payable (8%, due in 6 years) $40,000 Accounts payable $60,000 Income taxes currently payable $15,000 Liability for withholding taxes $4,000 Rent revenue collected in advance by up to four months $8,000 Bonds payable (due in 15 years). $100,000 Wages payable $6,000 Property taxes payable $3,000 Note payable (10%, due in 6 months) $22,000 Interest payable $1,200 Common stock $200,000 Using the information provided in the table, complete the following: Compute (a) working capital and (b) the quick ratio (quick assets are $120,000) Then, answer the following questions? 1. Why is working capital important to management? 2. How do financial analysts use the quick ratio? 3. Would your computations be different if the company reported $250,000 worth of contingent liabilities in the notes to the statements? Explain. Include in your explanation a definition of contingent liabilities and an example of a contingent liability. Assessment 7 Problem 2: Reading Publically Available Financial Statements Use the Lowe’s 2011 10-K, to answer the following questions, which all refer to the fiscal year end 2012. Indicate the source of each answer, including the page number from the Lowe’s 2011 10-K. 1. How many shares of common stock are authorized at the end of the current year? How many shares are issued and outstanding at the end of the current year? 2. Is there more than one class of common stock? If so, what is the name of each class of common stock? 3. Is there any preferred stock? If so, what is the dividend rate on the preferred stock, as a percentage of the par value of the preferred stock? 4. Did the company pay dividends on the common stock during the most recent reporting year? If so, what was the total amount of dividends paid and how much were they per share? 5. Does the company have any treasury stock? If so how much? 6. Has the company issued a stock dividend or a stock split over the past three reporting years? If so, what percentage and in what year or years? 7. Does the company’s common stock have par value? If it does, what is the par value? 8. Did the common buy back a significant amount of its shares in the current year? You can see this in the Statement of Stockholders’ Equity as a reduction in shares. Assessment 7 Problem 3: Comprehensive Problem 2 Bring together various financial analysis measures and interpret their meaning in order to draw conclusions about various companies. Note that each situation provided is to be considered independently of the others. Situation A: The following tables represent selected data from recent financial statements of Lincoln and Samuelson, Inc. (dollars in thousands of dollars): Problem 3, Table 1: Lincoln and Samuelson, Inc. Selected Items from Balance Sheets Assets (in thousands) December 31, 2012 December 31, 2011 Current assets: Cash and cash equivalents $4,000 $3,400 Accounts receivable (net of allowances of $32 and $28, respectively

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