Use the table for the question(s) below.
Consider
the following balance sheet:
Luther
Corporation
Consolidated
Balance Sheet
December
31, 2009 and 2008 (in $ millions)
Assets
2009
2008
Liabilities and Stockholders’ Equity
2009
2008
Current Assets
Current Liabilities
Cash
63.6
58.5
Accounts payable
87.6
73.5
Accounts receivable
55.5
39.6
Notes payable/
short-term debt
10.5
9.6
Inventories
45.9
42.9
Current maturities of long-term debt
39.9
36.9
Other current assets
6.0
3.0
Other current liabilities
6.0
12.0
Total current assets
171.0
144.0
Total current liabilities
144.0
132.0
Long-Term Assets
Long-Term Liabilities
Land
66.6
62.1
Long-term
debt
239.7
168.9
Buildings
109.5
91.5
Capital
lease obligations
—
—
Equipment
119.1
99.6
Total Debt
239.7
168.9
Less
accumulated
depreciation
(56.1)
(52.5)
Deferred taxes
22.8
22.2
Net property, plant, and equipment
239.1
200.7
Other long-term liabilities
—
—
Goodwill
60.0
—
Total
long-term liabilities
262.5
191.1
Other long-term assets
63.0
42.0
Total liabilities
406.5
323.1
Total
long-term assets
362.1
242.7
Stockholders’ Equity
126.6
63.6
Total Assets
533.1
386.7
Total liabilities and Stockholders’ Equity
533.1
386.7
16)
What is Luther’s net working capital in 2008?
A)
$12 million
B)
$27 million
C)
$39 million
D)
$63.6 million
17)
If in 2009 Luther has 10.2 million shares outstanding and these shares are
trading at $16 per share, then Luther’s Market-to-book ratio would be closest
to:
A)
0.39
B)
0.76
C)
1.29
D)
2.57
18)
If in 2009 Luther has 10.2 million shares outstanding and these shares are
trading at $16 per share, then what is Luther’s Enterprise Value?
A)
-$63.3 million
B)
$353.1 million
C)
$389.7 million
D)
$516.9 million
19)
If on December 31, 2008 Luther has 8 million shares outstanding trading at $15
per share, then what is Luther’s market-to-book ratio?
20)
If on December 31, 2008 Luther has 8 million shares outstanding trading at $15
per share, then what is Luther’s enterprise value?
2.3 The Income Statement
1)
Which of the following statements regarding the income statement is INCORRECT?
A)
The income statement shows the earnings and expenses at a given point in time.
B)
The income statement shows the flow of earnings and expenses generated by the
firm between two dates.
C)
The last or “bottom” line of the income statement shows the firm’s
net income.
D)
The first line of an income statement lists the revenues from the sales of
products or services.
2)
Gross profit is calculated as:
A)
Total sales – cost of sales – selling, general and administrative expenses –
depreciation and amortization
B)
Total sales – cost of sales – selling, general and administrative expenses
C)
Total sales – cost of sales
D)
None of the above
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