TEST BANK
N
To Accompany
U
Financial Statement Analysis and Security Valuation
5th edition
R
By
SE
Stephen Penman
TE
(Solutions at end of Test Bank)
ST
,Question 1 (32 Points)
The following are partial financial statements for an industrial firm
that you are required to analyze and value. All amounts are in millions of
dollars.
Income Statement for Fiscal Year 2004
N
Sales 2,000
Cost of goods sold 1,500
Gross margin 500
U
Selling and general expenses 300
Operating income 200
R
Interest income 5
205
SE
Interest expense 21
Restructuring charge 14
Income before tax 170
Income taxes 60
Net income J
TE
ST
1
, Balance Sheet, Year 2004
Assets Liabilities and Equity
2004 2003 2004 2003
Operating assets A 910 Operating liabilities 113 C
Debt securities 110 B Financing debt 360 340
Perferred stock 100 100
Common equity E 500
N
1,146 1,000 D 1,000
U
R
SE
Statement of Common Shareholders Equity, Year 2004
Balance, end of 2003 F
TE
Net income G
Common dividends (30)
Preferred dividends H
Unrealized loss on debt securities held (5)
ST
Foreign currency translation gain 4
Balance, end of 2004 I
_________________________________________________________________
2
, The firm’s statutory tax rate is 35.3%.
(a.) Supply the missing numbers, A to J.
A=
B=
C=
N
D=
E=
U
F=
R
G=
SE
H=
I=
J=
TE
ST
(If you are unable to calculate one of these numbers, make a reasonable guess before
proceeding to part (b) of the question.)
3
N
To Accompany
U
Financial Statement Analysis and Security Valuation
5th edition
R
By
SE
Stephen Penman
TE
(Solutions at end of Test Bank)
ST
,Question 1 (32 Points)
The following are partial financial statements for an industrial firm
that you are required to analyze and value. All amounts are in millions of
dollars.
Income Statement for Fiscal Year 2004
N
Sales 2,000
Cost of goods sold 1,500
Gross margin 500
U
Selling and general expenses 300
Operating income 200
R
Interest income 5
205
SE
Interest expense 21
Restructuring charge 14
Income before tax 170
Income taxes 60
Net income J
TE
ST
1
, Balance Sheet, Year 2004
Assets Liabilities and Equity
2004 2003 2004 2003
Operating assets A 910 Operating liabilities 113 C
Debt securities 110 B Financing debt 360 340
Perferred stock 100 100
Common equity E 500
N
1,146 1,000 D 1,000
U
R
SE
Statement of Common Shareholders Equity, Year 2004
Balance, end of 2003 F
TE
Net income G
Common dividends (30)
Preferred dividends H
Unrealized loss on debt securities held (5)
ST
Foreign currency translation gain 4
Balance, end of 2004 I
_________________________________________________________________
2
, The firm’s statutory tax rate is 35.3%.
(a.) Supply the missing numbers, A to J.
A=
B=
C=
N
D=
E=
U
F=
R
G=
SE
H=
I=
J=
TE
ST
(If you are unable to calculate one of these numbers, make a reasonable guess before
proceeding to part (b) of the question.)
3
