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    Assets: Café Richard Balance Sheet As at 31 December 2019 & 2020

    Uploaded by

    Jannatul Ferdousi Prïty
    This document provides a midterm exam for a financial management course. It includes 4 questions assessing students' abilities to calculate balances in savings accounts with different interest rates and compounding periods, repayment amounts on loans, financial ratios for a café business, and taxes on different sources of income for an investment company. Students are asked to calculate balances, repayment amounts, ratios, cash flows, and taxes based on financial information provided. The exam focuses on core financial concepts like interest, loans, accounting statements, ratios, cash flows, and taxes.

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    Assets: Café Richard Balance Sheet As at 31 December 2019 & 2020

    Uploaded by

    Jannatul Ferdousi Prïty
    31 views3 pages
    This document provides a midterm exam for a financial management course. It includes 4 questions assessing students' abilities to calculate balances in savings accounts with different interest rates and compounding periods, repayment amounts on loans, financial ratios for a café business, and taxes on different sources of income for an investment company. Students are asked to calculate balances, repayment amounts, ratios, cash flows, and taxes based on financial information provided. The exam focuses on core financial concepts like interest, loans, accounting statements, ratios, cash flows, and taxes.

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    FIN254_MIDTERM_FALL'20

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    This document provides a midterm exam for a financial management course. It includes 4 questions assessing students' abilities to calculate balances in savings accounts with different interest rates and compounding periods, repayment amounts on loans, financial ratios for a café business, and taxes on different sources of income for an investment company. Students are asked to calculate balances, repayment amounts, ratios, cash flows, and taxes based on financial information provided. The exam focuses on core financial concepts like interest, loans, accounting statements, ratios, cash flows, and taxes.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    31 views3 pages

    Assets: Café Richard Balance Sheet As at 31 December 2019 & 2020

    Uploaded by

    Jannatul Ferdousi Prïty
    This document provides a midterm exam for a financial management course. It includes 4 questions assessing students' abilities to calculate balances in savings accounts with different interest rates and compounding periods, repayment amounts on loans, financial ratios for a café business, and taxes on different sources of income for an investment company. Students are asked to calculate balances, repayment amounts, ratios, cash flows, and taxes based on financial information provided. The exam focuses on core financial concepts like interest, loans, accounting statements, ratios, cash flows, and taxes.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Introduction to Financial Management (FIN254)

    Midterm Fall’20
    Total marks (written) = 35
    1. It is now January 1, 2017. You will deposit $1,000 today into a savings account that pays 8 percent.
    a. If the bank compounds interest annually, how much will you have in your account on January 1, 2020?
    (2)
    b. What would your January 1, 2020, balance be if the bank used quarterly compounding? (2)
    c. Suppose you deposit $1,000 in 3 payments of $333.333 each on January 1 of 20018, 2019, and 2020.
    How much would you have in your account on January 1, 2020, based on 8 percent annual compounding?
    (2)
    d. How much would be in your account if the 3 payments began on January 1, 2017? (2)
    e. Suppose you deposit 3 equal payments in your account on January 1 of 2018, 2019, and 2020.
    Assuming an 8 percent interest rate, how large must your payments be to have the same ending balance as
    in part a? (2)

    2. A $25,000 loan is to be repaid in equal installments at the end of each of the next 3 years. The interest
    rate is 10 percent, compounded annually. Calculate the loan repayment being made each year. (2)

    3. Café RICHARD
    Balance Sheet

    As at 31 December 2019 & 2020

    Details 2020 ($) 2019 ($)


    Assets
    Cash $ 7,282 $ 57,600
    Accounts receivable 632,160 351,200
    Inventories 1,287,360 715,200
    Total current assets $1,926,802 $1,124,000
    Gross fixed assets 1,202,950 491,000
    Less accumulated depreciation 263,160 146,200
    Net fixed assets $ 939,790 $ 344,800
    Total assets $2,866,592 $1,468,800
    Liabilities and Equity
    Accounts payable $ 524,160 $ 145,600
    Notes payable 636,808 200,000
    Accruals 489,600 136,000
    Total current liabilities $1,650,568 $ 481,600
    Long-term debt 723,432 323,432
    Common stock (100,000 shares) 460,000 460,000
    Retained earnings 32,592 203,768
    Total equity $ 492,592 $ 663,768
    Total liabilities and equity $2,866,592 $1,468,800
    Café RICHARD

    Income Statement

    For the year ended 31 December 2019 & 2020

    Details 2020 ($) 2019 ($)

    Sales $6,034,000 $3,432,000

    Cost of goods sold 5,528,000 2,864,000

    Other expenses 519,988 358,672

    Total operating costs excluding $6,047,988 $3,222,672


    depreciation and amortization
    EBITDA ($ 13,988) $ 209,328

    Depreciation and amortization 116,960 18,900

    EBIT ($ 130,948) $ 190,428

    Interest expense 136,012 43,828

    EBT ($ 266,960) $ 146,600

    Taxes (40%) (106,784) 58,640

    Net income ($ 160,176) $ 87,960

    Dividend per share 0.11 0.22

    a. Draw up a cash flow statement for the year ended 31st December 2020. (10)
    b. Calculate for 2020, Free Cash Flow. (6)
    c. Calculate the following Ratios for the year 2020-
    Gross Profit Margin, Debt Ratio, Return on Common Equity (ROCE), Total Asset Turnover Ratio, (One
    year = 365 days) (4)
    4. Zach Ltd. produced the following data for the year 2015 –

    o Interest Income $4,650,000


    o Capital Gain realized $50,000
    o Dividend Income from company’s 25% ownership in XYZ Ltd. $65,000
    o Corporate tax rate 40%
    Calculate the tax on Interest Income, tax on Capital Gain and tax on Dividend Income. (3)

    Best of luck!

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