Banks Penalty Charges Appeal Fails | The Money Well
It has been a long time coming but at long last we have a ruling from the appeal court about penalty bank charges. This was the court case where the banking industry was hoping to prove that the way they apply bank charges was beyond … read more…
Stocks signal higher open as investors get some answers about …
Stocks signal higher open as investors get some answers about global banking industry News Feeds. … Post Stocks signal higher open as investors get some answers about global banking industry … read more…
Swiss Create Special Squad To Protect Bank Secrecy And Offshore …
Swiss Create Special Squad To Protect Bank Secrecy And Offshore Banking Interests. 26 Feb 2009. The Swiss Government is assembling a team of lawyers diplomats and experts to help defend its banking industry as pressure to prize open its … read more…
From Google Blog Search
Mortgages, Meltdowns, Recessions, debt, lions, tigers and bears- Oh my!
So, you done everything it takes to live your American Dream. You sacrificed, saved and scrounged up money to put down on that home that you?ve always wanted. You?ve worked hard to make sure your cred… read more…
Would the government printing money cause inflation?
We?re in a recession.
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How Benchmarking Applications Can Benefit Financial Services Marketing Initiatives
Successful benchmarking studies begin with clear objectives that relate directly to fulfilling the needs and wants of customers and prospects. Clearly stated goals provide a “litmus test” for corpo… read more…
From GoArticles.com
Open Question: Will creditors take away most of our cards/lower our limits/loans, etc as we reach senior citizen ages?
I mean all the effort we have now, all the history with our cards, the loans/lines of credit we have, banking history etc…
will all of that not matter, and be taken from us once we reach retirement age?
I mean, all the cars we have by then, the limits will probably be alot higher..we spend our whole lives working and getting these things to be as good as possible, or get the best deals,
only to have it possibly yanked from us entirely?
How does this usually work?
I mean as elderly people we still need our emergency cash, cards, and other things I’m sure.
But when we don’t work anymore or have the income….I’m not sure how the banking/credit industries will handle that.
Open Question: Accounting help !!!!!?
Billy Bob Incorporated has a line of credit from the Down South National Bank that is due to be renewed on February 1. The bank has requested the company’s current Income Statement and Balance Sheet that appear below.
Billy Bob Incorporated
Income Statement
Year Ended December 31
(in thousands)
Revenue:
Sales
$60,000
Other
4,500
Total revenue
64,500
Expenses:
Cost of goods sold
40,500
Selling and administrative
11,625
Depreciation and amortization
1,875
Interest
1,500
Total expenses
55,500
Income before income taxes
9,000
Income taxes
3,600
Net income
5,400
Less: Dividends to common shareholders ($3.86 per share)
2,550
Net income added to retained earnings
2,850
Retained earnings, beginning of year
8,550
Retained earnings, end of year
$11,400
Earnings per share
$8.18
Billy Bob Incorporated
Balance Sheet
As of December 31
(in thousands)
This Year
Last Year
Assets
Current assets:
Cash and marketable securities
$ 1,950
$ 1,575
Accounts receivable, net
3,600
3,750
Inventories
4,875
4,650
Prepaid items
375
225
Total current assets
10,800
10,200
Noncurrent assets:
Investments, at cost
7,950
7,950
Deposits
750
600
Property, plant, and equipment
21,000
19,500
Total assets
$40,500
$38,250
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term loans
$ 1,650
$ 1,800
Accounts payable
5,400
5,325
Salaries and wages payable
1,950
2,025
Total current liabilities
9,000
9,150
Long-term debt
12,000
12,825
Total liabilities
21,000
21,975
Shareholders’ equity:
Common stock, at par
3,300
3,150
Paid-in capital in excess of par
4,800
4,575
Total paid-in capital
8,100
7,725
Retained earnings
11,400
8,550
Total shareholders’ equity
19,500
16,275
Total liabilities and shareholders’ equity
$40,500
$38,250
The bank has also requested that Billy Bob calculate a number of financial ratios. Billy Bob’s financial ratios have not yet been calculated for this year, but the company’s accounting staff has gathered the following industry averages for the ratios from various sources.
Industry Averages
Return on total assets……………………………….
6.4%
Return on common shareholders’ equity……………………………….
12.5%
Current ratio………………………………..
1.86:1
Acid-test (quick) ratio………………………………..
0.85:1
Debt-to-equity ratio………………………………..
1.23:1
Times interest earned ratio………………………………..
7.78:1
Dividend payout ratio………………………………..
39.6%
______________________________________…
Question
Calculate via formula the following financial ratios for this year for Billy Bob
1. Return on total assets.
2. Return on common stockholders’ equity.
3. Current ratio.
4. Acid-test (quick) ratio.
5. Debt-to-equity ratio.
6. Times interest earned.
7. Dividend payout ratio.
Open Question: Accounting help 10 pts!?
Billy Bob Incorporated has a line of credit from the Down South National Bank that is due to be renewed on February 1. The bank has requested the company’s current Income Statement and Balance Sheet that appear below.
Billy Bob Incorporated
Income Statement
Year Ended December 31
(in thousands)
Revenue:
Sales
$60,000
Other
4,500
Total revenue
64,500
Expenses:
Cost of goods sold
40,500
Selling and administrative
11,625
Depreciation and amortization
1,875
Interest
1,500
Total expenses
55,500
Income before income taxes
9,000
Income taxes
3,600
Net income
5,400
Less: Dividends to common shareholders ($3.86 per share)
2,550
Net income added to retained earnings
2,850
Retained earnings, beginning of year
8,550
Retained earnings, end of year
$11,400
Earnings per share
$8.18
Billy Bob Incorporated
Balance Sheet
As of December 31
(in thousands)
This Year
Last Year
Assets
Current assets:
Cash and marketable securities
$ 1,950
$ 1,575
Accounts receivable, net
3,600
3,750
Inventories
4,875
4,650
Prepaid items
375
225
Total current assets
10,800
10,200
Noncurrent assets:
Investments, at cost
7,950
7,950
Deposits
750
600
Property, plant, and equipment
21,000
19,500
Total assets
$40,500
$38,250
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term loans
$ 1,650
$ 1,800
Accounts payable
5,400
5,325
Salaries and wages payable
1,950
2,025
Total current liabilities
9,000
9,150
Long-term debt
12,000
12,825
Total liabilities
21,000
21,975
Shareholders’ equity:
Common stock, at par
3,300
3,150
Paid-in capital in excess of par
4,800
4,575
Total paid-in capital
8,100
7,725
Retained earnings
11,400
8,550
Total shareholders’ equity
19,500
16,275
Total liabilities and shareholders’ equity
$40,500
$38,250
The bank has also requested that Billy Bob calculate a number of financial ratios. Billy Bob’s financial ratios have not yet been calculated for this year, but the company’s accounting staff has gathered the following industry averages for the ratios from various sources.
Industry Averages
Return on total assets……………………………….
6.4%
Return on common shareholders’ equity……………………………….
12.5%
Current ratio………………………………..
1.86:1
Acid-test (quick) ratio………………………………..
0.85:1
Debt-to-equity ratio………………………………..
1.23:1
Times interest earned ratio………………………………..
7.78:1
Dividend payout ratio………………………………..
39.6%
______________________________________…
Question
Use formulas referencing the cells in the IS and BS that you already prepared
[Suggestion] Figure out the correct answer using a calculator FIRST and then make sure this number matches your “formulated” number
By comparing the ratios calculated in Requirement 2 with the industry ratios, evaluate Billy Bob’s operation
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