财务报告与分析三友会计名著译丛 第章习题答案

1、PAGE PAGE 26Chapterr 7Long-Teerm Deebt-Paaying AbiliityPROBLEMMSPROBLEMM 71Earninngs beefore interrest aand taax: Net saless $1,0079,1443 Costt of ssales( 7792,7555) Sellling aand addminisstratiion( 2664,5666) $ 21,8222a.b.Cashh basiis timmes innteresst earrned:PROBLEMM 72 Recurrring Earniings EExcl

2、udding IIntereest Expennse, TTax Exxpensee, Equuity EEarninngs, a. Timees Intterestt Earnned = and MMinoriity Eaarninggs Interrest EExpensse, Inncludiing Capittalizeed Intterestt Incoome beefore incomme taxxes$675 Pluss inteerest 60 Adjuusted incomme$735 Inteerest expennse$ 60Times Interrest EEarned

3、d = $7735 = 12.255 timees perr yearr $660b.Adjustted inncome from (partt a)$7351/3 off operratingg leasse payymentss (1/33 x $1150) 50Adjustted inncome, inclludingg renttals$785Intereest exxpensee$ 601/3 off operratingg leasse payymentss 50 $110Fixed Chargge Covveragee = $7785 = 7.14 timess per year

4、 $1110PROBLEMM 73 Recurrring Earniings, Excluuding Interrest Exxpensee, Taxx Expeense, Equitty Earrning, a. Timees Intterestt Earnned = and MMinoriity Eaarninggs_ IIntereest Exxpensee, Inccludinng Caapitallized InterrestIncomee befoore inncome taxess and extrraordiinary chargges$36Plus iintereest 11

5、6(1) Addjusteed inccome 552(2) Innteresst exppense$16 Timees Intterestt Earnned: (1) diividedd by (2) = 3.25 timess per year Reecurriing Eaarninggs, Exxcludiing Innteresst Exxpensee, Taxx Expeense, Equitty Earrningss, annd Minnorityy Earnnings + Intterestt Porttionb. Fixeed Chaarge CCoveraage = Of R

6、eentalss_ Innteresst Exppense, Inclludingg Capiitalizzed Innteresst + IIntereest Poortionn Of RRentallsAdjustted inncome (partt a)$ 521/3 off operratingg leasse payymentss (1/33 x $660) 20(l) Addjusteed inccome, incluuding rentaals $72Intereest exxpensee $161/3 off operratingg leasse payymentss 20(2

7、) Addjusteed intterestt expeense $36Fixed chargge covveragee: (1) diviided bby (2) = 2.00 tiimes pper yeearPROBLEMM 74a. Debtt Ratiio = b.Debtt/Equiity Raatio = c.Ratiio of Totall Debtt to TTangibble Neet Worrth =Total Liabiilitiees = $174,979 = $174,979 = 70.99%Tangibble Neet Worrth $249,222 $2,332

8、4 $246,898d.Kauffman CCompanny hass finaanced over 41% oof itss asseets byy the use oof funnds frrom ouutsidee credditorss. Thee Debtt/Equiity Raatio aand thhe Debbt to Tangiible NNet Woorth RRatio are oover 770%. WWhetheer theese raatios are rreasonnable depennds uppon thhe staabilitty of earniings

9、.PROBLEMM 7-5RatioTransacctionTimesInteresstEarnedDebtRatioDebt/EquityTotal DDebt/TangiblleNet WorrthPurchasse of builddings finannced bby morrtgageeb. Purcchase invenntory on shhort-tterm lloanc.Decllaratiion annd payyment of caash diividenndd.Decllaratiion annd payyment of sttock ddivideende.Firmm

10、 incrreasess proffits bby cuttting cost of saalesf.Apprropriaation of reetaineed earrningssg.Salee of ccommonn stocckh.Repaaymentt of llong-tterm bbank lloani.Convversioon of bondss to ccommonn stocck j.Salee of iinventtory aat greeater than cost-00+00+0-0+0-0+0-0PROBLEMM 76a.Timees Intterestt Earnn

11、ed:Times iintereest eaarned relattes eaarninggs beffore iintereest exxpensee, taxx, minnorityy earnnings, and equitty inccome tto intterestt expeense. The hhigherr thiss ratiio, thhe bettter tthe innteresst covveragee. Thee timees intterestt earnned haas impprovedd mateeriallly in strenngthenning tt

12、he loongterm debt posittion. Consiiderinng thaat thee debtt ratiio andd the debt to taangiblle nett wortth havve remmainedd fairrly coonstannt, thhe proobablee reasson foor thee imprrovemeent iss an iincreaase inn proffits.The timmes innteresst earrned oonly iindicaates tthe innteresst covveragee. I

13、t is liimitedd in tthat iit doees nott conssider otherr posssible fixedd charrges, and iit doees nott indiicate the pproporrtion of thhe firrms reesourcces thhat haave coome frrom deebt.Debt Raatio:The debbt rattio reelatess the totall liabbilitiies too the totall asseets.The lowwer thhis raatio, th

14、e llower the pproporrtion of asssets that have been finannced bby creeditorrs.For Aroodex CCompanny, thhis raatio hhas beeen stteady for tthe paast thhree yyears. Thiss ratiio inddicatees thaat aboout 400% of the ttotal assetts havve beeen finnancedd by ccredittors. For mmost ffirms, a 400% debbt ra

15、ttio woould bbe connsiderred too be rreasonnable.The debbt rattio iss limiited iin thaat it relattes liiabiliities to thhe boook vallue off totaal asssets. Many assetts wouuld haave a valuee greaater tthan bbook vvalue. Thiss tendds to oversstate the ddebt rratio and, thereefore, usuaally rresultts

16、in a connservaative ratioo. Thee debtt ratiio doees nott conssider immeddiate profiitabillity aand, tthereffore, can bbe missleadiing ass to tthe fiirms abiliity too handdle loongterm debt.Debt too Tanggible Net WWorth:The debbt to tangiible nnet woorth rrelatees tottal liiabiliities to shharehoolde

17、rss equuity lless iintanggible assetts. Thhe lowwer thhis raatio, the llower the pproporrtion of taangiblle asssets tthat hhas beeen fiinanceed by crediitors.Arodex Compaany haas hadd a sttable ratioo of aapproxximateely 811% forr the past threee yearrs. Thhis inndicattes thhat crreditoors haave fii

18、nanceed 81% as mmuch aas thee sharreholdders aafter elimiinatinng inttangibbles ffrom tthe shharehoolderss conttributtionfor mmost ffirms, thiss woulld be consiideredd to bbe reaasonabble. TThe deebt too tanggible net wworth ratioo is mmore cconserrvativve thaan thee debtt ratiio beccause of thhe el

19、iiminattion oof inttangibble ittems. It iss alsoo consservattive ffor thhe samme reaason tthat tthe deebt raatio wwas coonservvativee, in that book valuee is uused ffor thhe asssets aand maany asssets have a vallue grreaterr thann bookk valuue. Thhe debbt to tangiible nnet woorth rratio also does no

20、t cconsidder immmediaate prrofitaabilitty andd, theereforre, caan be misleeadingg as tto thee firmms abbilityy to hhandlee longgterm debt.Collecttive iinfereences one mmay drraw frrom thhe rattios oof Aroodex, Compaany:Overalll it aappearrs thaat Aroodex CCompanny hass a reeasonaable aand immproviin

21、g loongterm debt posittion. The ddebt rratio and tthe deebt too tanggible net wworth ratioos inddicatee thatt the propoortionn of ddebt aappearrs to be reeasonaable. The ttimes interrest eearnedd appeears tto be reasoonablee and improoving.The staabilitty of earniings aand coompariison wwith iindust

22、try raatios will be immportaant inn reacching a connclusiion onn the longterm debt posittion oof Aroodex CCompanny.b.Ratiios arre bassed onn pastt dataa. Thee futuure iss whatt is iimporttant, and uuncerttaintiies off the futurre cannnot bbe acccurateely deetermiined bby rattios bbased upon past dat

23、a.Ratios proviide onnly onne asppect oof a ffirmss longg-termm debtt-payiing abbilityy. Otther iinformmationn, succh as inforrmatioon aboout maanagemment aand prroductts, iss alsoo impoortantt.A compaarisonn of tthis ffirmss ratiios wiith raatios of otther ffirms in thhe samme inddustryy woulld be h

24、elpfful inn ordeer to decidde if the rratioss are reasoonablee.PROBLEMM 77 Recurrring Earniings, Excluuding Interresta. 1. TTimes Interrest Expeense, Tax EExpensse, Eqquity Earniings, Earnned = and Minorrity EEarninngs_ Inteerest Expennse, IIncludding Capittalizeed Intterestt $1162,0000 = 88.1 tiime

25、s pper yeear $ 20,00002. Debtt Ratiio = Totall Liabbilitiies TTotal Assetts $193,0000 = 32.2% $600,00003. Debtt/Equiity Raatio = Totaal Liaabilitties SStockhholderrs Eqquity $1193,0000 = 447.4% $4407,0000 4.DDebt tto Tanngiblee Net Worthh Ratiio = TTotal Liabiilitiees Tangiible NNet Woorth $1993,000

26、0 = 49.9% $4407,0000 $20,000b. New assett struucturee for all pplans: Asssets Cuurrentt asseets$226,000 Prropertty, pllant, and equiipmentt 554,000 Inntangiibles 20,000 Tootal aassetss$800,000 Liabbilitiies annd Equuity Plann ACurrennt Liaabilitties$ 93,000 $200,000,0000/1000 =Longtterm ddebt 100,00

27、02,0000,000 shareesPreferrred sstock 250,000Commonn equiity 357,000 No chhange in neet inccome$8000,000Plan BBCurrennt liaabilitties$ 93,000 $200,000,0000/100 =Longtterm ddebt 100,000 20,0000,0000 sharresPreferrred sstock 50,000Commonn stocck 120,000Premiuum on commoon stoock 300,000Retainned eaarni

28、nggs 137,000 No chhange in neet inccome$8000,000Plan CCCurrennt liaabilitties $ 93,000 Operaating Incomme $1162,0000Longtterm ddebt 300,000 Interrest eexpensse 52,0000*Preferrred sstock 50,000 1110,0000Commonn equiity 357,000 Taxess (40%) 44,0000 $8800,0000 Neet Inccome $ 666,000* $200,000 + 16% ($2

29、000,0000) = $52,00001.Reecurriing Eaarninggs, Exxcludiing Innteresst Exppense,Times InterrestTax EExpensse, Eqquity Earniings, and MMinoriity Eaarninggs Eaarned =Interrest EExpensse, Inncludiing Caapitallized InterrestPlan APlan BPlan C2.Debtt = Totall Liabbilitiies Ratio Totaal Asssets PPlan AA Pll

30、an B Plann C 3.Debtt/Equiity Raatio = Plan APlan BPlan C4.Debtt to TTangibble Neet Worrth = Plan AA Plan B Pllan C c. Prefferredd Stocck Altternattive:Advanttages:1.Lessser drrop inn earnnings per sshare than underr the commoon stoock allternaative.2.Not the aabsoluute reeductiion inn earnnings that

31、 accommpanieed thee debtt alteernatiive.3.Theere woould bbe an improovemennt in the DDebt RRatio, Debtt/Equiity Raatio, and TTotal Debt to Taangiblle Nett Wortth Rattio.4.Doess not have the rreduceed timmes innteresst earrned tthat aaccomppaniedd alteernatiive off issuuing llongterm debt.Disadvaanta

32、gees:1.An iincreaase inn the fixedd prefferredd diviidend chargge thaat thee firmm mustt pay beforre anyy diviidendss can be paaid too commmon sttockhoolderss.Common Stockk Alteernatiive:Advanttages:1.No increease iin fixxed obbligattions.2.Theere woould bbe an improovemennt in the DDebt RRatio, Deb

33、tt/Equiity Raatio, and tthe Tootal DDebt tto Tanngiblee Net Worthh Ratiio.3.Nott the absollute rreducttion iin earrningss thatt accoompaniied thhe debbt altternattive.4.Doees nott havee the reducced tiimes iintereest eaarned that accommpanieed altternattive oof isssuing longterm debt.Disadvaantagees

34、:1.Maxiimum ddilutiion inn earnnings per sshare of thhe thrree allternaativess.Long-TTerm BBonds Alterrnativve:Advanttages:1. Higgher eearninngs peer shaare thhan wiith coommon stockk.Disadvaantagees:1.Matteriall declline iin Timmes Innteresst Earrned.2.A mmateriial inncreasse in the DDebt RRatio, D

35、ebtt/Equiity Raatio,and TTotal Debt to Taangiblle Nett Wortth Rattio.3.Abssolutee reduuctionn in eearninngs.4.Inccreasee in tthe innteresst fixxed chharge that must be paaid.d.The 10% ppreferrred sstock increeased the ppreferrred ddivideends wwhich are nnot taax dedductibble; tthereffore, the ccost

36、oof theese fuunds iis thee 10% amounnt. Thhe 16% bondds aree tax deducctiblee and, therreforee, thee afteer-taxx costt is 99.6% (16% xx (1.40).Note too Insttructoor: Yoou mayy wantt to ttake tthis oopporttunityy to ppoint out tto thee studdents that the aalternnativee thatt shouuld bee seleected is

37、grreatlyy inflluenceed by the cchangee in eearninngs annd thee speccific debt struccture. The concllusionns in this probllem woould nnot neecessaarily be trrue wiith chhangedd assuumptioons.PROBLEMM 78a.Timees Intterestt Earnned = Earninngs frrom coontinuuing ooperattions beforreincomee taxees andd

38、equiity eaarninggs(1) Addd bacck intterestt expeense(1) $ 74,780,0000(2) Addjusteed earrningss(2) $ 37,646,0000 $112,4426,0000Times interrest eearnedd: (22) divvided by (11) 11.99 ttimes per yyearb.Earnnings from contiinuingg operrationnsPlus:(1) Innteresst$ 65,135,0000 Incoome taaxes 37,394,0000(2)

39、 Addjusteed earrningss$140,175,0000Times interrest eearnedd: (22) divvided by (11) 33.72 ttimes per yyearc.Remooving equitty earrningss givees a mmore cconserrvativve timmes innteresst earrned rratio. Thee equiity inncome is ussuallyy subsstantiially more than the ccash ddivideend reeceiveed froom t

40、hee relaated iinvesttmentss. Thherefoore, tthe fiirm caannot depennd on this incomme to coverr inteerest paymeents.PROBLEMM 79a.1.TTimes Interrest EEarnedd = 2.Debbt Rattio = 3.Debbt Equuity = 4.Debbt to Tangiible NNet Woorth =b.No, Barkeer Commpany has aa timees intterestt earnned off 5.3 timess wh

41、ille thee induustry averaage iss 7.2 timess. Thhis inndicattes thhat Baarker Compaany haas lesss thaan aveerage coverrage oof itss inteerest. Alsso, Baarker Compaany haas a mmuch hhigherr thann averrage ddebt/eequityy, andd debtt to ttangibble neet worrth raatio.c.Alleen Commpany has aa bettter tiim

42、es iintereest eaarned, debtt ratiio, deebt/eqquity, and debt to taangiblle nett wortth.PROBLEMM 7-100a.1.TTimes Interrest EEarnedd = 2004:$280,000 - $1566,000= 7.229 timmes peer yeaar $117,00002003:$302,000 - $1577,000= 9.006 timmes peer yeaar $116,00002002:$286,000 - $1544,000= 8.880 timmes peer ye

43、aar $115,00002001:$270,000 - $1500,000= 8.228 timmes peer yeaar $114,50002000:$248,000 - $1477,000= 4.339 timmes peer yeaar $223,0000Recurrring Earniings, ExcluudingInterrest, Tax EExpensse, EqquityEarniings, and MMinoriity Eaarninggs +2.Fixxed Chharge Coverrage = Inteerest Portiion off Renttals Int

44、errest EExpensse, Inncludiing Capittalizeed Intterestt + InnteresstPortiion off Renttals2004:$280,000 - $1566,000 + $100,000= 4.996 timmes peer yeaar $117,0000 + $110,00002003:$302,000 - $1577,000 + $9,000= 6.116 timmes peer yeaar $116,0000 + $99,000 2002:$286,000 - $1544,000 + $9,500= 5.778 timmes peer yeaar $115,0000 + $99,5002001:$270,000 - $1500,000 + $100,000= 5.331 timmes peer yeaar $114,5000 + $110,00002000:$248,000 - $1477,000 + $9,000= 3.444 timmes peer yeaar $223,0000 + $99,0003.Debbt Rattio = Totall Liabbilitiies Tottal Asssets2004:$88,000