Financial Cases And Modeling

Questions & Answers

1.1 Calculate the following ratios for Madeira Plc: Gross Profit Margin Net Profit Margin Net Asset Turnover Receivable Days Payable Days Return on Capital Employed Debt/Equity Ratio Return on Equity (12 marks) 1.2 Comment on the financial performance of Madeira Plc between the years 2019 and 2021 using the ratios above and any other financial measure you feel appropriate. (10 marks) 1.3 In 2019 the share price of Madeira was 2 AED per share. Today the share price is 5 AED per share. Critically evaluate if you believe the directors of Madeira Plc are maximising the wealth of shareholders. What other goals might the company consider.


Question 3 Blue Moon plc is looking to take on a new investment. The company will evaluate two mutually exclusive projects, whose details are given below. The company's cost of capital is 12%.


1 What is partnership ordinary income for Focus LLC (Form 1065, page 1, line 22) 2 Please complete the information for Schedule K of Form 1065, lines 1-13 for Focus LLC. In addition use this tab to enter the member's share next to it that you would enter on the real Schedule K-1 3 What is the Analysis of Net Income (Loss) found on Form 1065, page 5, Line 1 for Focus LLC 4 What is Molly's tax basis in Focus LLC as of December 31, 2021. 5 What is Molly's ending tax capital account in Focus LLC. On December 31,2021. 6 What are the tax implications for Molly's contribution of services in exchange for a fully vested capital and profits interest? 7 What is Shelby's tax basis in Focus LLC as of December 31, 2021? 8 Shelby's ending tax capital account as of December 31, 2021 9 Bankroll's tax basis in its investment in Focus LLC as of December 31, 2021 O Bankroll's ending tax capital account in Focus LLC as of December 31, 2021 1 Bankroll's taxable income for the year ended December 31, 2021 2 What is the tax treatment for the distributions made for both Travis and Judy 3 Travis's tax basis in Bankroll's stock as of January 1, 2022 4 Judy's tax basis in Bankroll's stock as of January 1, 2022 5 What would have happened if Bankroll would have structured itself as a partnership or an S Corp - list some ways that your answers would have changed and which entity you would have recommended and why.


1. What is "Cost of Capital"? Why do Dale and Lee care about the cost of capital/


2. Create a table of all the sources of Financing for Walmart. Use the Balance Sheet that you are provided. You should be able to determine Long-term Debt, Short term debt, Sources of equity financing.


3. Determine which source of debt should be used in calculating the cost of long-term debt. What is the cost of long-term debt? (Need to list source and cost)


Using the Capital Asset Pricing model, determine the Cost of Equity.


5. Create a revised table of sources of financing and determine the Debt-Equity ratio.


7. Ultimately Dale and Lee need to determine a hurdle rate or a Minimum Attractive Rate of Return (MARR). What should that value be and why?


Accounting 420/5559 Intercompany equipment transactions in a worksheet Parent acquired shares of subsidiary as


Accouting 420/5559 Intercompnay equipment transactions in a worksheet Shown below are Parent and Subsidiary


T Intercompnay equipment transactions in a worksheet Consolidations worksheet for 20x02


Assume a 38% tax rate and a 10% discount rate when discounting future dividends. Assume that the new debt is constant and perpetual and that the buyback operation is unexpected by stock market participants. 1) What are the primary business risks of UST? Evaluate them from the point of view of a bondholder. 2) Why is UST considering a leveraged recapitalization after such a long history of conservative debt policy? 3) Should UST undertake the $1bn recapitalization? Prepare a pro-forma income statement for 1999 to analyze whether UST will be able to make interest rate payments. How sensitive is your conclusion to the rating UST bonds receive?


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