Cash Flow Essay
ASSIGNMENT # 1
Total Marks: 100
‘I hear, I forget; I see, I remember; I do, I understand.’ A Chinese proverb
Financial or management ratios and Cash flow diagrams
Problem #1 [8+4+4=16]: Consider the balance sheet entries as shown in Table 1 for Iron Eagle Corporation.
(a) Compute (i) Current assets (ii) Current liabilities (iii) Working capital, (iv) Shareholders’ equity for the corporation.
(b) If the firm had a net income of $550,000 after taxes, what is the earning per share?
(c) When the firm issued its common stock, what was the market price of the share?
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|Goodwill 30,000 |
|Liabilities and Shareholder’s Equity |
|Notes payable 60,000 |
|Accounts payable 110,000 |
|Income taxes payable 90,000 |
|Long-term mortgage bonds 410,000 |
|Preferred stock, 6%, $110 par value (1,000 shares) 110,000 |
|Common stock, $16 par value (10,000 shares) 160,000 |
|Capital surplus 160,000 |