Culligan, Inc., has current assets of $5,300, net fixed assets of $26,000, current liabilities of $3,900, and long-term debt of $14,200. What is the value of the shareholders’ equity account for this firm? How much is net working capital?
2. Ragsdale, Inc., has sales of $493,000, costs of $210,000, depreciation expense of $35,000, interest expense of $19,000, and a tax rate of 35 percent. What is the net income for the firm? Suppose the company paid out $50,000 in cash dividends. What is the addition to retained earnings?
3. Klingon Cruisers, Inc., purchased new cloaking machinery three years ago for $9.5 million. The machinery can be sold to the Romulans today for $6.3 million. Klingon’s current balance sheet shows net fixed assets of $5 million, current liabilities of $2.1 million, and net working capital of $800,000. If all the current assets were liquidated today, the company would receive $2.8 million cash. What is the book value of Klingon’s assets today? What is the market value?
4. Ranney, Inc., has sales of $14,900, costs of $5,800, depreciation expense of $1,300, and interest expense of $780. If the tax rate is 40 percent, what is the operating cash flow, or OCF?
