Graded Project 081776 Worldwide Widget Manufacturing, Inc


Graded Project
1
Graded Project
1
Financial Management
OBJECTIVE
Demonstrate the ability to perform financial calculations and
analysis related to the concepts covered in this course.
PURPOSE
The purpose of this project is to give you practical experi
-
ence with financial computations and decision making in the
Financial Management field. In this project, you’ll calculate
and analyze company balance sheets in the role of a financial
manager. Your assignment is to analyze the financial position
of the companies mentioned and make recommendations as
to the most productive use of their assets and the ideal finan
-
cial structures for their balance sheets. Show all calculations
or calculator inputs for credit. Do all work using equations
and a calculator. Do not submit or use an Excel spreadsheet
to calculate.
Part 1: Financial Statements and Ratios
1A. You’re the chief financial officer (CFO) of Worldwide
Widget Manufacturing, Inc. The company manufactures and
sells widgets at factories in the United States and internationally.
Listed below are partial financial statements for Worldwide
Widget Manufacturing, Inc. Fill in the missing information in
each of the following financial statements. Answer spaces are
given below.
Graded Project
2
Worldwide Widget Manufacturing, Inc.
Balance Sheet as of December 31, 2015 and 2014
(in millions of dollars)
2015
2014
2015
2014
Assets
Liabilities and Equity
Current assets:
Current liabilities:
Cash and marketable
securities
$ 427
$ 322
Accrued wages and
taxes
$ 309
$ 257
Accounts receivable
a. ?
259
Accounts payable
381
b. ?
Inventory
815
797
Notes payable
$ 492
$ 421
Total
$1,542
$1,378
Total
$1,182
$997
Fixed assets:
Long-term debt:
1,934
c. ?
Gross plant
and equipment
d. ?
$2,817
Total
3,116
2,956
Less: Depreciation
368
254
Stockholders’ equity:
Net plant and
equipment
$2,872
$2,563
Preferred stock
(30 million shares)
$ 30
$30
Other long-term assets
521
487
Common stock
and paid-in surplus
(250 million shares)
300
e. ?
Retained earnings
1,489
1,142
Total FA
f. ?
$3,050
Total Equity
$1,819
$1,472
Total assets
$4,935
$4,428
Total liabilities
and equity
$4,935
$4,428
a.
Accounts receivable for 2015_______
b.
Accounts payable for 2014_______
c.
Gross plant and equipment for 2015_______
d.
Long-term debt for 2014_______
e.
Common stock and paid-in surplus (250 million shares) for 2014_______
f.
Total FA for 2015_______
3
Graded Project
3
Worldwide Widget Manufacturing, Inc.
Income Statement for Years Ending December 31, 2015 and 2014
(in millions of dollars)
2015
2014
Net sales
g. ?
$2,018
Less: Cost of goods sold
753
h. ?
Gross profits
$1,623
$1,189
Less: Other operating expenses
423
167
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
$1,200
$1,022
Less: Depreciation
114
114
Earnings before interest and taxes (EBIT)
$1,086
$ 908
Less: Interest
i. ?
128
Earnings before taxes (EBT)
$ 949
$ 780
Less: Taxes
j. ?
234
Net income
$ 664
$ 546
Less: Preferred stock dividends
98
98
Net income available to common stock holders
$ 566
$ 448
Less: Common stock dividends
219
199
Addition to retained earnings
$ 347
$ 249
Per (common) share data:
Earnings per share (EPS)
k. ?
$1.79
Dividends per share (DPS)
$ 0.88
l. ?
Book value per share (BVPS)
m. ?
$ 5.77
Market value per share (MVPS)
$23.97
$22.47
g.
Net sales for 2015_______
h.
Less: Cost of goods sold for 2014_______
i.
Less: Interest for 2015_______
j.
Less: Taxes for 2015_______
k.
Earnings per share (EPS) for 2015_______
l.
Dividends per share (DPS) for 2014_______
m.
Book value per share (BVPS) for 2015_______
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