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Questions and Answers
What is the Times Interest Earned for the first exercise?
What is the Times Interest Earned for the first exercise?
What is the Cash Basis Times Interest Earned calculated in the first exercise?
What is the Cash Basis Times Interest Earned calculated in the first exercise?
In Exercise 2, what is the Adjusted Income before calculating Times Interest Earned?
In Exercise 2, what is the Adjusted Income before calculating Times Interest Earned?
What is the formula for calculating Fixed Charge Coverage as outlined in Exercise 2?
What is the formula for calculating Fixed Charge Coverage as outlined in Exercise 2?
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What is the value of the Adjusted Interest Expense used for Fixed Charge Coverage in Exercise 2?
What is the value of the Adjusted Interest Expense used for Fixed Charge Coverage in Exercise 2?
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What does the Fixed Charge Coverage calculation result in for the year in Exercise 2?
What does the Fixed Charge Coverage calculation result in for the year in Exercise 2?
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What component is added to Adjusted Income in the Fixed Charge Coverage calculation?
What component is added to Adjusted Income in the Fixed Charge Coverage calculation?
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What is the total amount of liabilities stated in the document?
What is the total amount of liabilities stated in the document?
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What is the Debt Ratio for Plan C?
What is the Debt Ratio for Plan C?
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What is the Debt/Equity Ratio for Plan A?
What is the Debt/Equity Ratio for Plan A?
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Which advantage is associated with the Preferred Stock Alternative?
Which advantage is associated with the Preferred Stock Alternative?
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What is the primary disadvantage of the Common Stock Alternative?
What is the primary disadvantage of the Common Stock Alternative?
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How does Plan C compare to Plan A and B regarding the Debt to Tangible Net Worth Ratio?
How does Plan C compare to Plan A and B regarding the Debt to Tangible Net Worth Ratio?
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Which of the following represents a disadvantage of the Preferred Stock Alternative?
Which of the following represents a disadvantage of the Preferred Stock Alternative?
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What is the key reason the Common Stock Alternative does not result in an absolute reduction in earnings?
What is the key reason the Common Stock Alternative does not result in an absolute reduction in earnings?
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Which plan has the highest total liabilities?
Which plan has the highest total liabilities?
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What was the gross profit percentage for the year 2006 based on the vertical common-size analysis?
What was the gross profit percentage for the year 2006 based on the vertical common-size analysis?
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In the horizontal common-size analysis, what was the percentage increase in net earnings from 2004 to 2006?
In the horizontal common-size analysis, what was the percentage increase in net earnings from 2004 to 2006?
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Which expense category had the lowest percentage in the vertical common-size analysis for 2006?
Which expense category had the lowest percentage in the vertical common-size analysis for 2006?
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What was the percentage decrease in earnings from operations when comparing 2006 to 2005 in horizontal common-size analysis?
What was the percentage decrease in earnings from operations when comparing 2006 to 2005 in horizontal common-size analysis?
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According to the vertical common-size analysis, what percentage of revenue was attributed to income taxes in 2006?
According to the vertical common-size analysis, what percentage of revenue was attributed to income taxes in 2006?
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What was the percentage increase in gross profit from 2005 to 2006 in the horizontal common-size analysis?
What was the percentage increase in gross profit from 2005 to 2006 in the horizontal common-size analysis?
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In the vertical common-size analysis for 2006, what is the ratio of earnings from ongoing operations to total revenue?
In the vertical common-size analysis for 2006, what is the ratio of earnings from ongoing operations to total revenue?
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Which year showed a decrease in selling, general, and administrative expenses based on the vertical common-size analysis?
Which year showed a decrease in selling, general, and administrative expenses based on the vertical common-size analysis?
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What is the advantage of long-term bonds compared to common stock?
What is the advantage of long-term bonds compared to common stock?
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What financial metric showed an increase from 2006 to 2007 in Ahl Enterprise?
What financial metric showed an increase from 2006 to 2007 in Ahl Enterprise?
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What was the after-tax cost of the 16% bonds assuming a 40% tax rate?
What was the after-tax cost of the 16% bonds assuming a 40% tax rate?
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Which disadvantage is associated with long-term bonds?
Which disadvantage is associated with long-term bonds?
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What was Ahl Enterprise's Net Profit Margin in 2007?
What was Ahl Enterprise's Net Profit Margin in 2007?
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What is the Total Asset Turnover for Ahl Enterprise in 2006?
What is the Total Asset Turnover for Ahl Enterprise in 2006?
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What was the percentage increase in Return on Common Equity from 2006 to 2007?
What was the percentage increase in Return on Common Equity from 2006 to 2007?
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What effect does the issuance of preferred stock have on dividends?
What effect does the issuance of preferred stock have on dividends?
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What was the percentage of earnings retained in 2006?
What was the percentage of earnings retained in 2006?
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What was the earnings per share for 2005?
What was the earnings per share for 2005?
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Calculate the Dividend Payout ratio for 2007.
Calculate the Dividend Payout ratio for 2007.
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Which year saw the highest Dividend Yield?
Which year saw the highest Dividend Yield?
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Which of the following figures corresponds to the cash dividends in 2006?
Which of the following figures corresponds to the cash dividends in 2006?
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What was the market price per share for 2007?
What was the market price per share for 2007?
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What is the Price/Earnings Ratio for 2007?
What is the Price/Earnings Ratio for 2007?
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What was the increase in net income from 2006 to 2007?
What was the increase in net income from 2006 to 2007?
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What was the percentage increase in total current assets from 2005 to 2006?
What was the percentage increase in total current assets from 2005 to 2006?
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Which category saw the highest increase in percentage in liabilities from 2005 to 2006?
Which category saw the highest increase in percentage in liabilities from 2005 to 2006?
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What was the percentage decrease in Class A common stock treasury holdings from 2005 to 2006?
What was the percentage decrease in Class A common stock treasury holdings from 2005 to 2006?
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Which asset category had the lowest percentage increase in 2006 compared to 2005?
Which asset category had the lowest percentage increase in 2006 compared to 2005?
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What was the percentage of total stockholders’ equity in 2006?
What was the percentage of total stockholders’ equity in 2006?
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What percentage increase did goodwill experience from 2005 to 2006?
What percentage increase did goodwill experience from 2005 to 2006?
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Which of the following current liabilities showed a decrease in percentage in 2006?
Which of the following current liabilities showed a decrease in percentage in 2006?
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How much did the noncurrent deferred taxes account increase to in 2006?
How much did the noncurrent deferred taxes account increase to in 2006?
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Which item had the highest percentage in the liabilities section in 2006?
Which item had the highest percentage in the liabilities section in 2006?
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What was the total liabilities and stockholders’ equity percentage in 2005?
What was the total liabilities and stockholders’ equity percentage in 2005?
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Study Notes
Financial Analysis Solutions Booklet
- The booklet contains solutions for financial analysis exercises from ESC Rennes School of Business's FI403 Financial Analysis course, covering the 2018-2019 academic year,
- The booklet is divided into sections, each corresponding to a different session's exercises, including short-term analysis, long-term analysis, profitability analysis, investor's perspective, and cash flow analysis.
- Examples of exercises and their solutions are included within the booklet, demonstrating how to approach financial analysis problems for various business scenarios.
Solutions Exercises Session 1
- Exercise 1 (Example): A company issued stock for $25,000 cash, purchased $7,000 of equipment on account, received $8,000 cash for services performed, and paid $850 for rent.
Solutions Exercises Session 2
- Exercise 1 (Example): Presents balance sheets for Kelly Securities, Inc. and Subsidiaries, analyzing changes in asset and liability percentages for years 2005 and 2006.
Solutions Exercises Session 3: Short-Term Analysis
- Exercise 1 (Example): Demonstrates calculation of current ratio, acid-test ratio, and inventory turnover.
Solutions Exercises Session 4: Long-Term Analysis
- Exercise 1 (Example): Illustrates calculating times interest earned and cash basis times interest earned.
- Exercise 2 (Example): Includes calculation of recurring earnings and fixed charge coverage.
Solutions Exercises Session 5: Profitability Analysis
- Exercise 1 (Example): Illustrates calculating net profit margin, return on assets, total asset turnover, and return on common equity for two different years.
Solutions Exercises Session 6: Investor's Perspective
- Exercise 1 (Example): Shows calculation of degree of financial leverage for a specific company.
Solutions Exercises Session 7: Cash Flow Analysis
- Exercise 1 (Example): Presents a table categorizing various transactions as either operating, investing, or financing activities and affects on cash, showing whether cash is increasing or decreasing.
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Description
This booklet provides solutions for financial analysis exercises from the FI403 course at ESC Rennes School of Business for the 2018-2019 academic year. It covers various topics such as short-term and long-term analysis, profitability, investor perspectives, and cash flow analysis with practical examples. Perfect for students looking to enhance their understanding of financial analysis.
