Corporate Finance Analysis with Problems and Solutions

Running head: CORPORATE FINANCE
Corporate Finance
Name of the Student:
Name of the University:
Authors Note:

CORPORATE FINANCE ANALYSIS
1
Table of Contents
Chapter 3 Problems:...................................................................................................................2
3-1 Days Sales Outstanding:......................................................................................................2
3-2 Debt Ratio:...........................................................................................................................2
3-3 Market/Book Ratio:.............................................................................................................2
3-4 PE Ratio:..............................................................................................................................2
3-5 ROE:....................................................................................................................................3
3-6 Du Pont Analysis:................................................................................................................3
3-7 Current and Quick Ratios:...................................................................................................3
Chapter 4 Problems:...................................................................................................................3
4-1 FV of Single Amount:..........................................................................................................3
4-2 PV of Single Amount:..........................................................................................................4
4-6 FV of Ordinary Annuity vs Annuity Due:...........................................................................4
4-13 PV of an Annuity:..............................................................................................................4
4-14 PV Uneven Cash Flow Stream:.........................................................................................5
Bibliography:..............................................................................................................................6

CORPORATE FINANCE ANALYSIS
2
Chapter 3 Problems:
3-1 Days Sales Outstanding:
Particulars Value
Days Sales Outstanding 20.00
Average sales per day $ 20,000.00
Receivables Days Sales Outstanding * Average sales per day
Receivables 20 * 20,000
Receivables $ 400,000.00
3-2 Debt Ratio:
Particulars Value
Notes Payable $ 5.00
Long-term debt $ 25.00
Total Liabilities $ 30.00
Total Assets $ 200.00
Debt ratio Total Liabilities / Total Assets
Debt ratio 0.15
3-3 Market/Book Ratio:
Particulars Value
Market price per share $ 75.00
Common equity $ 6,000,000,000.00
Shares outstanding $ 800,000,000.00
Book value per share $ 7.50
Market/book ratio Market price per share / Book value per share
Market/book ratio 10.00
3-4 PE Ratio:
Particulars Value
Price/cash flow ratio 8.00
Cash flow per share $ 3.00
Price Per Share Price/cash flow ratio * Cash flow per share
Price Per Share $ 24.00
Earnings per share $ 1.50
Price/earnings ratio Price per share / Earnings per share