Finance Paper

1. Complete problem: Total Net Operating Capital
   
   
   
   • XYZ, Inc. reported $20 million in operating current assets, $25 million in net fixed assets, and $6 million in operating current liabilities. How much total net operating capital does XYZ, Inc. have?
   
   
   • Show your work.
   
   
   
   


2. Complete problem: Balance Sheet Analysis
   
   
   
   • Complete the balance sheet and sales information in the table that follows for XYZ, Inc., using the following financial data:
   
   
   • Show your work.
   
   
   
   

            Total assets turnover: 1.5

            Gross profit margin on sales: (Sales – Cost of goods sold)/Sales = 25%

            Total liabilities-to-assets ratio: 40%

            Quick ratio: 0.80

            Days sales outstanding (based on 365-day year): 36.5 days

            Inventory turnover ratio: 3.75

  Partial Income Statement Information

Sales

Costs of goods sold

  Balance Sheet Information

 

Cash

Accounts payable

Accounts receivable

Long-term debt

50,000

Inventories

Common Stock

Fixed Assets

Retained earnings

100,00

Total Assets

$400,00

Total liabilities and equity

1. Complete problem: Yield to Maturity for Annual Payments
   
   
   
   XYZ Corporation’s bonds have 14 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a price of $950. What is their yield to maturity? Show your work.


2. Complete problem: Required Rate of Return
   
   Show your work.
   
   Suppose rRF = 6%; rM = 10%; and rA = 14%


3. Calculate Stocks A’s beta.


4. If Stock A’s beta were 2.0, then what would be A’s new required rate of return?


5. Complete problem: Portfolio Beta
   
   
   
   You have a $4 million portfolio consisting of a $100,000 investment in each of 20 different stocks. The portfolio has a beta of 1.1. You are considering selling $100,000 worth of one stock with a beta of 0.9 and using the proceeds to purchase another stock with a beta of 1.4. What will the portfolio’s new beta be after these transactions? Show your work.

Prepare this Assignment responding to the problems as a Excel® or Microsoft® Word®, showing all necessary formulas and steps. List each question, followed by your answer.

The Module 2 Competency Assessment has 3 parts.

Part 1 Prepare balance sheet analysis using financial data

• Calculate corporate tax liabilities


• Calculate liabilities and equity

Part 2 Analyze Portfolio Beta

• Calculate stock beta

Part 3 Calculate corporate tax liabilities

• Calculate yield to maturity for annual payments


• Analyze portfolio beta

Minimum Submission Requirements

• This Assessment should be a Microsoft Word (minimum 350 words) document, in addition to the title and reference pages.


• Respond to the questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. Your submission should be highly organized, logical, and focused.


• Your submission must be written in Standard English and demonstrate exceptional content, organization, style, and grammar and mechanics.


• Your submission should provide a clearly established and sustained viewpoint and purpose.


• Your writing should be well ordered, logical and unified, as well as original and insightful.


• A separate page at the end of your submission should contain a list of references, in APA format. Use your textbook, the Library, and the internet for research.


• Be sure to cite both in-text and reference list citations where appropriate and reference all sources. Your sources and content should follow proper APA citation style.