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Hourly Exam Spring-2021 Department of Business Administration

1. The document provides instructions for an hourly exam on principles of finance to be submitted by Friday, April 2nd. It details submission guidelines including writing answers directly on the blackboard, word file requirements, and plagiarism policies. 2. Question 1 provides selected financial information for SMR Corporation and asks students to calculate 10 financial ratios using the provided balance sheet and income statement figures. 3. Question 2 provides limited financial information for Artistic Mills and asks students to calculate 5 financial metrics using the data. Students are instructed to follow formatting guidelines and answer conceptual questions to demonstrate understanding of class concepts.

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AnasAhmed
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103 views3 pages

Hourly Exam Spring-2021 Department of Business Administration

1. The document provides instructions for an hourly exam on principles of finance to be submitted by Friday, April 2nd. It details submission guidelines including writing answers directly on the blackboard, word file requirements, and plagiarism policies. 2. Question 1 provides selected financial information for SMR Corporation and asks students to calculate 10 financial ratios using the provided balance sheet and income statement figures. 3. Question 2 provides limited financial information for Artistic Mills and asks students to calculate 5 financial metrics using the data. Students are instructed to follow formatting guidelines and answer conceptual questions to demonstrate understanding of class concepts.

Uploaded by

AnasAhmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Hourly Exam Spring-2021

Department of Business Administration

Subject: Principal of Finance Submission Day: Friday


Instructor: Sumair Iqbal Submission Date: 02-Apr-2021
Program: BBA Max. Marks: 10

Please follow the instructions carefully:

1. Write your answers directly on the Black Board (recommended) or upload word file
before the due date on Blackboard.
2. Write your name and registration ID on the first page of your Word file.
3. Answer scripts can only be uploaded on Blackboard only during the submission time.
4. To avoid any unforeseen problems, you are advised to follow the Guide lines
communicated by the Faculty Members.
5. Submission of answer copy(ies) will be considered acceptable through Blackboard only.
Therefore, do not submit your document through email or any other medium.
6. Use 12 pt. font size and Times New Roman font style along with 1-inch page margins.
7. Follow the requirements of the word limit and the marking criteria while writing your
answers.
8. Provide relevant, original and conceptual answers, as this exam aims to test your ability to
examine, explain, modify or develop concepts discussed in class.
9. Do not copy answers from the internet or other sources. The plagiarism of your answers
may be checked through Turnitin.
10. Double check your word file before uploading it on BlackBoard to ensure that you have
uploaded the correct file with your answers.
Question Number 1) (05 Marks)
Use the following selected financial information for SMR Corporation to answer
questions
SMR Corporation
Balance Sheet
December 31, 2020

Assets Liabilities and stockholders' equity


Current assets Current liabilities
Cash 2 Accounts payable 36
Short-term investments 10 Accrued liabilities 25
Accounts receivable 52 Total current liabilities 61
Inventory 57
Other current assets 8 Long-term debt 102
Total current assets 129 Total liabilities 163

Long-term assets Stockholders' equity


Net Plant 195 Common stock (10) 110
Retained earnings 51
Total stockholders' equity 161
Total assets 324 Total liabilities and equity 324

SMR Corporation
Income Statement
For the Year Ended December 31, 2020

Net sales 345


Cost of goods sold 248
Gross profit 97
Operating expenses 74
Operating profit 23
Interest expense 8
Earnings before taxes 15
Income tax expense 4
Net profit 11

Additional information: Market price of stock is Rs.25. Firm declared and paid dividend 20% on
par value of stock.

Compute following ratios:

1. Current ratio
2. Quick ratio
3. Debt ratio
4. Equity ratio
5. Inventory turnover in days(use 360 days)
6. Receivable turnover in days(use 360 days)
7. Earnings per share
8. Book value per share
9. Interest coverage ratio
10. Gross Profit ratio
Question Number 2) (05 Marks)

Artistic Mills
Balance Sheet
As at 31-Dec-20
Assets Liabilities & Equity
Cash   Current Liabilities
Receivables   Long Term Debt  
Inventory   Total Debt $ 700,000
Plant   Common Equity
Total Assets   Total Claims  
 

Total debt to Net Worth 1.4


Total Asset Turnover 3
Inventory Turnover 9
Average Collection Period 20 days
Current Ratio 3.3
Quick Ratio 1.3

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