Description
Below are the NMB Company financial statements for the last four years. You are to review and use each sheet to complete the assignment.
Answer all questions, perform all calculations and submit in one Excel Spreadsheet.
Q1-1 Prepare a Balance Sheet
Prepare a balance sheet for the NMB company as of December 2020, based on the following information: cash = $110,000; patents and copyrights = $750,000, accounts payable = $200,000, accounts receivable = $300,000; tangible net fixed assets = $2,000,000; inventory = $400,000; notes payable = $300,000; accumulated retained earnings = $2,500,000; long-term debt = $175,000.
Q2-2: Using Income statement
Given the following information, calculate the depreciation expense; sales = 10,000, costs = 6000, additions to retained earnings = 1000; dividend paid = 625; interest expense = 500; tax rate = 35 percent.
Q2-3: Calculating Total cash flows
NMB Company shows the following information on its 2020 income statement; Sales = $50,000; costs = $30,000; other expenses = $2,500; depreciation expense = $2,500; interest expense = $5,000; tax paid = $3,400; dividends paid = $3,200. In addition, you are told that the firm issued $500 in new equity during 2020, and repaid $1,000 in outstanding long-term debt.
- What is the cash flow from operation?
- What is the cash flow to creditors?
- What is the cash flow to stockholders?
- If net fixed assets increased by $2,900 during the year, what were the addition to MNB?
Q2-4 Four Year Use of Debt
Below are the MNB financial statements for the last four years.
- You are to review the firm revenue, gross profit, operating income, and net income trends over the last four years.
- The firm may need to raise additional capital in the near future, and you need to review the firm’s past financing decisions using both the firm’s balance sheets and its statements of cash flows. Specifically, you need to summarize the assessment of the firm’s use of debt financing over these four years.
