Deck 3: Financial Statement Analysis and Long-Term Planning

Question 1

Noncash items refer to:

A)the credit sales of a firm.
B)the trade payables of a firm.
C)the costs incurred for the purchase of intangible non-current assets.
D)expenses charged against revenues that do not directly affect cash flow.
E)all accounts on the statement of financial position other than cash on hand.

Answer 1

expenses charged against revenues that do not directly affect cash flow.

Question 2

The non-current liabilities of a firm are liabilities:

A)that come due within the next 12 months.
B)that do not come due for at least 12 months.
C)owed to the firm's suppliers.
D)owed to the firm's shareholders.
E)the firm expects to incur within the next 12 months.

Answer 2

that do not come due for at least 12 months.

Question 3

_____ is calculated by adding back non-cash expenses to net income and adjusting for changes in current assets and liabilities.

A)Operating cash flow
B)Capital spending
C)Net working capital
D)Cash flow from operations
E)Cash flow to creditors

Answer 3

Cash flow from operations

Question 4

Dividends per share is equal to dividends paid:

A)divided by the par value of ordinary equity.
B)divided by the total number of shares outstanding.
C)divided by total shareholders' equity.
D)multiplied by the par value of the ordinary equity.
E)multiplied by the total number of shares outstanding.

Question 5

A current asset is:

A)an item currently owned by the firm.
B)an item that the firm expects to own within the next year.
C)an item currently owned by the firm that will convert to cash within the next 12 months.
D)the amount of cash on hand the firm currently shows on its statement of financial position.
E)the market value of all items currently owned by the firm.

Question 6

Earnings per share is equal to:

A)net income divided by the total number of shares outstanding.
B)net income divided by the par value of the ordinary equity.
C)gross income multiplied by the par value of the ordinary equity.
D)operating income divided by the par value of the ordinary equity.
E)net income divided by total shareholders' equity.

Question 7

Which of the following are included in current liabilities?
I.Note payable to a supplier in eighteen months.
II.Debt payable to a mortgage company in nine months.
III.Trade payables to suppliers.
IV.Loan payable to the bank in fourteen months.

A)I and III only.
B)II and III only.
C)III and IV only.
D)II,III,and IV only.
E)I,II,and III only.

Question 8

_____ refers to the difference between a firm's current assets and its current liabilities.

A)Operating cash flow
B)Capital spending
C)Net working capital
D)Cash flow from assets
E)Cash flow to creditors

Question 9

The financial statement showing a firm's accounting value on a particular date is the:

A)income statement.
B)statement of financial position.
C)statement of cash flows.
D)tax reconciliation statement.
E)shareholders' equity sheet.

Question 10

_____ refers to the firm's interest payments less any net new borrowing.

A)Operating cash flow
B)Capital spending
C)Net working capital
D)Cash flow from shareholders
E)Cash flow to creditors

Question 11

Your _____ tax rate is the amount of tax payable on the next taxable euro you earn.

A)deductible
B)residual
C)total
D)average
E)marginal

Question 12

The financial statement summarizing a firm's accounting performance over a period of time is the:

A)income statement.
B)statement of financial position.
C)statement of cash flows.
D)tax reconciliation statement.
E)shareholders' equity sheet.

Question 13

_____ refers to the firm's dividend payments less any net new equity raised.

A)Operating cash flow
B)Capital spending
C)Net working capital
D)Cash flow from creditors
E)Cash flow to shareholders

Question 14

An increase in total assets:

A)means that net working capital is also increasing.
B)requires an investment in non-current assets.
C)means that shareholders' equity must also increase.
D)must be offset by an equal increase in liabilities and shareholders' equity.
E)can only occur when a firm has positive net income.

Question 15

Net working capital is defined as:

A)total liabilities minus shareholders' equity.
B)current liabilities minus shareholders' equity.
C)non-current assets minus non-current liabilities.
D)total assets minus total liabilities.
E)current assets minus current liabilities.

Question 16

Which of the following are included in current assets?
I.Equipment
II.Inventory
III.Trade payables
IV.Cash

A)II and IV only.
B)I and III only.
C)I,II,and IV only.
D)III and IV only.
E)II,III,and IV only.

Question 17

_____ refers to the changes in net capital assets.

A)Operating cash flow
B)Cash flow from investing
C)Net working capital
D)Cash flow from assets
E)Cash flow to creditors

Question 18

a(n.____ asset is one which can be quickly converted into cash without significant loss in value.

A)current
B)non-current
C)intangible
D)liquid
E)non-current.

Question 19

_____ refers to the cash flow that results from the firm's ongoing,normal business activities.

A)Cash flow from operating activities
B)Capital spending
C)Net working capital
D)Cash flow from assets
E)Cash flow to creditors

Question 20

Your _____ tax rate measures the total taxes you pay divided by your taxable income.

A)deductible
B)residual
C)total
D)average
E)marginal

Question 21

When making financial decisions related to assets,you should:

A)always consider market values.
B)place more emphasis on book values than on market values.
C)rely primarily on the value of assets as shown on the statement of financial position.
D)place primary emphasis on historical costs.
E)only consider market values if they are less than book values.

Question 22

Depreciation:

A)is a noncash expense that is recorded on the income statement.
B)increases the net non-current assets as shown on the statement of financial position.
C)reduces both the net non-current assets and the costs of a firm.
D)is a non-cash expense which increases the net operating income.
E)decreases net non-current assets,net income,and operating cash flows.

Question 23

When you are making a financial decision,the most relevant tax rate is the _____ rate.

A)average
B)non-current
C)marginal
D)total
E)variable

Question 24

Assets are listed on the statement of financial position in order of:

A)decreasing liquidity.
B)decreasing size.
C)increasing size.
D)relative life.
E)None of the above.

Question 25

Liquidity is:

A)a measure of the use of debt in a firm's capital structure.
B)equal to current assets minus current liabilities.
C)equal to the market value of a firm's total assets minus its current liabilities.
D)valuable to a firm even though liquid assets tend to be less profitable to own.
E)generally associated with intangible assets.

Question 26

Which of the following accounts are included in shareholders' equity?
I.Interest paid.
II.Retained earnings.
III.Capital surplus.
IV.Non-current liabilities.

A)I and II only.
B)II and IV only.
C)I and IV only.
D)II and III only.
E)I and III only.

Question 27

Under International Accounting Standards,a firm's assets are reported at:

A)market value.
B)liquidation value.
C)intrinsic value.
D)cost.
E)None of the above.

Question 28

According to International Accounting Standards,

A)income is recorded based on the matching principle.
B)income is recorded based on the realization principle.
C)costs are recorded based on the liquidity principle.
D)net income is recorded based on the realization principle.
E)depreciation is recorded as it affects the cash flows of a firm.

Question 29

As seen on an income statement:

A)interest is deducted from income and increases the total taxes incurred.
B)the tax rate is applied to the earnings before interest and taxes when the firm has both depreciation and interest expenses.
C)depreciation is shown as an expense but does not affect the taxes payable.
D)depreciation reduces both the pretax income and the net income.
E)interest expense is added to earnings before interest and taxes to get pretax income.

Question 30

A firm starts its year with a positive net working capital.During the year,the firm acquires more short-term debt than it does short-term assets.This means that:

A)the ending net working capital will be negative.
B)both accounts receivable and inventory decreased during the year.
C)the beginning current assets were less than the beginning current liabilities.
D)trade payables increased and inventory decreased during the year.
E)the ending net working capital can be positive,negative,or equal to zero.

Question 31

An increase in which one of the following will cause the operating cash flow to increase?

A)Depreciation.
B)Change in net working capital.
C)Net working capital.
D)Taxes.
E)Costs.

Question 32

Cash flow to shareholders must be positive when:

A)the dividends paid exceed the net new equity raised.
B)the net sale of ordinary equity exceeds the amount of dividends paid.
C)no income is distributed but new shares of stock are sold.
D)both the cash flow to assets and the cash flow to creditors are negative.
E)both the cash flow to assets and the cash flow to creditors are positive.

Question 33

Dividends per share:

A)increase as the net income increases as long as the number of shares outstanding remains constant.
B)decrease as the number of shares outstanding decrease,all else constant.
C)are inversely related to the earnings per share.
D)are based upon the dividend requirements established by International Accounting Standards.
E)are equal to the amount of net income distributed to shareholders divided by the number of shares outstanding.

Question 34

According to International Accounting Standards,costs are:

A)recorded as incurred.
B)recorded when paid.
C)matched with revenues.
D)matched with production levels.
E)expensed as management desires.

Question 35

The cash flow to creditors includes the cash:

A)received by the firm when payments are paid to suppliers.
B)outflow of the firm when new debt is acquired.
C)outflow when interest is paid on outstanding debt.
D)inflow when trade payables decreases.
E)received when non-current liabilities is paid off.

Question 36

The earnings per share will:

A)increase as net income increases.
B)increase as the number of shares outstanding increase.
C)decrease as the total revenue of the firm increases.
D)increase as the tax rate increases.
E)decrease as the costs decrease.

Question 37

Which one of the following accounts is generally the most liquid?

A)Inventory
B)Building
C)Accounts receivable
D)Equipment
E)Patent

Question 38

Which one of the following statements concerning liquidity is correct?

A)If you sold an asset today,it is a liquid asset.
B)If you can sell an asset next year at a price equal to its actual value,the asset is highly liquid.
C)Trademarks and patents are highly liquid.
D)The less liquidity a firm has,the lower the probability the firm will encounter financial difficulties.
E)Statement of financial position accounts are listed in order of decreasing liquidity.

Question 39

Which equality is the basis for the statement of financial position?

A)Non-current Assets = Shareholder's Equity + Current Assets
B)Assets = Liabilities + Shareholder's Equity
C)Assets = Current Non-current liabilities + Retained Earnings
D)Non-current Assets = Liabilities + Shareholder's Equity
E)None of the above.

Question 40

Book value:

A)is equivalent to market value for firms with non-current assets.
B)is based on historical cost.
C)generally tends to exceed market value when non-current assets are included.
D)is more of a financial than an accounting valuation.
E)is adjusted to market value whenever the market value exceeds the stated book value.

Question 41

At the beginning of the year,a firm has current assets of £380 and current liabilities of £210.At the end of the year,the current assets are £410 and the current liabilities are £250.What is the change in net working capital?

A)-£30
B)-£10
C)£0
D)£10
E)£30

Question 42

The cash flow of the firm must be equal to:

A)cash flow to equity minus cash flow to debtholders.
B)cash flow to debtholders minus cash flow to equity.
C)cash flow to governments plus cash flow to equity.
D)cash flow to equity plus cash flow to debtholders.
E)None of the above.

Question 43

Pete's Boats has beginning non-current liabilities of €180 and ending non-current liabilities of €210.The beginning and ending total debt balances are €340 and €360,respectively.The interest paid is €20.What is the amount of the cash flow to creditors?

A)-€10
B)€0
C)€10
D)€40
E)€50

Question 44

Given the tax rates as shown,what is the average tax rate for a firm with taxable income of €126,500?
$$\begin{array} { | l | l | } \hline \text { Taxuble Inctane } & \text { Tw Rate } \\\hline \text { €0 - 50,000 } & 15 \% \\\hline 50,001 - 75,000 & 25 \% \\\hline 75,001 - 100,000 & 34 \% \\\hline 100,001 - 335,000 & 39 \% \\\hline\end{array}$$

A)21.38%
B)23.88%
C)25.76%
D)34.64%
E)39.00%

Question 45

Brad's Company has equipment with a book value of £500 that could be sold today at a 50% discount.Its inventory is valued at £400 and could be sold to a competitor for that amount.The firm has £50 in cash and customers owe them £300.What is the accounting value of its liquid assets?

A)£50
B)£350
C)£700
D)£750
E)£1,000

Question 46

Which of the following statements concerning the income statement is true?

A)It measures performance over a specific period of time.
B)It determines after-tax income of the firm.
C)It includes deferred taxes.
D)It treats interest as an expense.
E)All of the above.

Question 47

At the beginning of the year,non-current liabilities of a firm is €280 and total debt is €340.At the end of the year,non-current liabilities is €260 and total debt is €350.The interest paid is €30.What is the amount of the cash flow to creditors?

A)-€50
B)-€20
C)€20
D)€30
E)€50

Question 48

A firm has £300 in inventory,£600 in non-current assets,£200 in accounts receivables,£100 in trade payables,and £50 in cash.What is the amount of the current assets?

A)£500
B)£550
C)£600
D)£1,150
E)£1,200

Question 49

Your firm has net income of £198 on total sales of £1,200.Costs are £715 and depreciation is £145.The tax rate is 34%.The firm does not have interest expenses.What is the operating cash flow?

A)£93
B)£241
C)£340
D)£383
E)£485

Question 50

Net capital spending is equal to:

A)net additions to net working capital.
B)the net change in non-current assets.
C)net income plus depreciation.
D)total cash flow to shareholders less interest and dividends paid.
E)the change in total assets.

Question 51

Cash flow to shareholders is defined as:

A)interest payments.
B)repurchases of equity less cash dividends paid plus new equity sold.
C)cash flow from financing less cash flow to creditors.
D)cash dividends plus repurchases of equity minus new equity financing.
E)None of the above.

Question 52

The tax rates are as shown.Your firm currently has taxable income of €79,400.How much additional tax will you owe if you increase your taxable income by €21,000?
$$\begin{array} { | l | l | } \hline \text { Taxuble Inctame } & \text { Tax Rate } \\\hline €0 - 50,000 & 15 \% \\\hline 50,001 - 75,000 & 25 \% \\\hline 75,001 - 100,000 & 44 \% \\\hline 100,001 - 335,000 & 29 \% \\\hline\end{array}$$

A)€7,004
B)€7,014
C)€7,140
D)€7,160
E)€7,174

Question 53

The total assets are €900,the non-current assets are €600,non-current liabilities is €500,and short-term ebt is €200.What is the amount of net working capital?

A)€0
B)€100
C)€200
D)€300
E)€400

Question 54

Martha's Enterprises spent €2,400 to purchase equipment three years ago.This equipment is currently valued at €1,800 on today's statement of financial position but could actually be sold for €2,000.Net working capital is €200 and non-current liabilities is €800.Assuming the equipment is the firm's only non-current asset,what is the book value of shareholders' equity?

A)€200
B)€800
C)€1,200
D)€1,400
E)The answer cannot be determined from the information provided.

Question 55

Which of the following are all components of the statement of cash flows?

A)Cash flow from operating activities,cash flow from investing activities,and cash flow from financing activities
B)Cash flow from operating activities,cash flow from investing activities,and cash flow from divesting activities
C)Cash flow from internal activities,cash flow from external activities,and cash flow from financing activities
D)Cash flow from brokering activities,cash flow from profitable activities,and cash flow from non-profitable activities
E)None of the above.

Question 56

Free cash flow is:

A)without cost to the firm.
B)net income plus taxes.
C)an increase in net working capital.
D)cash that the firm is free to distribute to creditors and shareholders.
E)None of the above.

Question 57

Which of the following is not included in the computation of operating cash flow?

A)Earnings before interest and taxes
B)Interest paid
C)Depreciation
D)Current taxes
E)All of the above are included.

Question 58

According to International Accounting Standards,revenue is recognized as income when:

A)a contract is signed to perform a service or deliver a good.
B)the transaction is complete and the goods or services are delivered.
C)payment is requested.
D)income taxes are paid.
E)All of the above.

Question 59

Teddy's Pillows has beginning net non-current assets of £480 and ending net non-current assets of £530.Assets valued at £300 were sold during the year.Depreciation was £40.What is the amount of capital spending?

A)£10
B)£50
C)£90
D)£260
E)£390

Question 60

Art's Boutique has sales of £640,000 and costs of £480,000.Interest expense is £40,000 and depreciation is £60,000.The tax rate is 34%.What is the net income?

A)£20,400
B)£39,600
C)£50,400
D)£79,600
E)£99,600

Question 61

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$


-What is the cash flow to creditors for 2010?

A)-€170
B)-€35
C)€135
D)€170
E)€205

Question 62

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$


-What is the change in net working capital from 2009 to 2010?

A)-€93
B)-€7
C)€7
D)€85
E)€97

Question 63

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$


-What is the cash flow to shareholders for 2010?

A)€408
B)€417
C)€452
D)€482
E)€503

Question 64

Nabors plc
2010 Income Statement
( $£$ in millions)
$\begin{array}{|l|c|}\hline \text { Net sales } & £ 9,610 \\\hline \text { Less: Cost of goods sold } & 6,310 \\\hline \text { Less: Depreciation } & 1,370 \\\hline \text { Eamings before interest and taxes } & 1,930 \\\hline \text { Less: Interest paid } & 630 \\\hline \text { Taxable Income } & £ 1,300 \\\hline \text { Less: Taxes } & 455 \\\hline \text { Net income } & £ \quad 845 \\\hline\end{array}$

Nabors ple
2009 and 2010 Statement of financial positions
( $£$ in millions)
$\begin{array}{|l|l|l|l|l|l|}\hline & 2009 &2010 & & 2009 & 2010 \\\hline \text { Cash } & £, 310 & £ 405 & \text { Trade payables } & £ 2,720 & £ 2,570 \\\hline \text { Accounts rec. } & 2,640 & 3,055 & \text { Notes payable } & 100 & 0 \\\hline \text { Inventory } & 3,275 & \underline{3,850} & \text { Total } & £ 2,820 & £ 2,570 \\\hline \text { Total } & £ 6,225 & £ 7,310 & \text { Non-current liabilities } & 7,875 & 8,100 \\\hline \text { Net non-current assets } & 10,960 & 10,670 & \text { Ordinary equity } & 5,000 & 5,250 \\\hline & & & \text { Retained eamings } & \underline{1,490} & 2,060 \\\hline \text { Total Assets } & £ 17,185 & £ 17,980 & \text { Total liab.\& equity } & £ 17,185 & £ 17,890 \\\hline\end{array}$

-What is the amount of the non-cash expenses for 2010?

A)£570
B)£630
C)£845
D)£1,370
E)£2,000

Question 65

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$


-What is the cash flow of the firm for 2010?

A)€50
B)€247
C)€297
D)€447
E)€517

Question 66

Nabors plc
2010 Income Statement
( $£$ in millions)
$\begin{array}{|l|c|}\hline \text { Net sales } & £ 9,610 \\\hline \text { Less: Cost of goods sold } & 6,310 \\\hline \text { Less: Depreciation } & 1,370 \\\hline \text { Eamings before interest and taxes } & 1,930 \\\hline \text { Less: Interest paid } & 630 \\\hline \text { Taxable Income } & £ 1,300 \\\hline \text { Less: Taxes } & 455 \\\hline \text { Net income } & £ \quad 845 \\\hline\end{array}$

Nabors ple
2009 and 2010 Statement of financial positions
( $£$ in millions)
$\begin{array}{|l|l|l|l|l|l|}\hline & 2009 &2010 & & 2009 & 2010 \\\hline \text { Cash } & £, 310 & £ 405 & \text { Trade payables } & £ 2,720 & £ 2,570 \\\hline \text { Accounts rec. } & 2,640 & 3,055 & \text { Notes payable } & 100 & 0 \\\hline \text { Inventory } & 3,275 & \underline{3,850} & \text { Total } & £ 2,820 & £ 2,570 \\\hline \text { Total } & £ 6,225 & £ 7,310 & \text { Non-current liabilities } & 7,875 & 8,100 \\\hline \text { Net non-current assets } & 10,960 & 10,670 & \text { Ordinary equity } & 5,000 & 5,250 \\\hline & & & \text { Retained eamings } & \underline{1,490} & 2,060 \\\hline \text { Total Assets } & £ 17,185 & £ 17,980 & \text { Total liab.\& equity } & £ 17,185 & £ 17,890 \\\hline\end{array}$

-What is the amount of net new borrowing for 2010?

A)-£225
B)-£25
C)£0
D)£25
E)£225

Question 67

Nabors plc
2010 Income Statement
( $£$ in millions)
$\begin{array}{|l|c|}\hline \text { Net sales } & £ 9,610 \\\hline \text { Less: Cost of goods sold } & 6,310 \\\hline \text { Less: Depreciation } & 1,370 \\\hline \text { Eamings before interest and taxes } & 1,930 \\\hline \text { Less: Interest paid } & 630 \\\hline \text { Taxable Income } & £ 1,300 \\\hline \text { Less: Taxes } & 455 \\\hline \text { Net income } & £ \quad 845 \\\hline\end{array}$

Nabors ple
2009 and 2010 Statement of financial positions
( $£$ in millions)
$\begin{array}{|l|l|l|l|l|l|}\hline & 2009 &2010 & & 2009 & 2010 \\\hline \text { Cash } & £, 310 & £ 405 & \text { Trade payables } & £ 2,720 & £ 2,570 \\\hline \text { Accounts rec. } & 2,640 & 3,055 & \text { Notes payable } & 100 & 0 \\\hline \text { Inventory } & 3,275 & \underline{3,850} & \text { Total } & £ 2,820 & £ 2,570 \\\hline \text { Total } & £ 6,225 & £ 7,310 & \text { Non-current liabilities } & 7,875 & 8,100 \\\hline \text { Net non-current assets } & 10,960 & 10,670 & \text { Ordinary equity } & 5,000 & 5,250 \\\hline & & & \text { Retained eamings } & \underline{1,490} & 2,060 \\\hline \text { Total Assets } & £ 17,185 & £ 17,980 & \text { Total liab.\& equity } & £ 17,185 & £ 17,890 \\\hline\end{array}$

-What is the cash flow of the firm for 2010?

A)£430
B)£485
C)£1,340
D)£2,590
E)£3,100

Question 68

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$


-What is net new borrowing for 2010?

A)-€70
B)-€35
C)€35
D)€70
E)€105

Question 69

Cost of goods sold $\quad\quad\quad\quad\quad£ 3,210$

Interest $\quad\quad\quad\quad\quad\quad\quad\quad\quad£ 215$

Dividends $\quad\quad\quad\quad\quad\quad\quad\quad£ 160$

Depreciation $\quad\quad\quad\quad\quad\quad\quad£ 375$

Change in retained earnings $\quad\quad£ 360$

Tax rate $\quad\quad\quad\quad\quad\quad\quad\quad\quad35 \%$

-What is the operating cash flow for 2010?

A)£520
B)£800
C)£1,015
D)£1,110
E)£1,390

Question 70

Peggy Grey's Cookies has net income of €360.The firm pays out 40% of the net income to its shareholders as dividends.During the year,the company sold €80 worth of ordinary equity.What is the cash flow to shareholders?

A)€64
B)€136
C)€144
D)€224
E)€296

Question 71

Nabors plc
2010 Income Statement
( $£$ in millions)
$\begin{array}{|l|c|}\hline \text { Net sales } & £ 9,610 \\\hline \text { Less: Cost of goods sold } & 6,310 \\\hline \text { Less: Depreciation } & 1,370 \\\hline \text { Eamings before interest and taxes } & 1,930 \\\hline \text { Less: Interest paid } & 630 \\\hline \text { Taxable Income } & £ 1,300 \\\hline \text { Less: Taxes } & 455 \\\hline \text { Net income } & £ \quad 845 \\\hline\end{array}$

Nabors ple
2009 and 2010 Statement of financial positions
( $£$ in millions)
$\begin{array}{|l|l|l|l|l|l|}\hline & 2009 &2010 & & 2009 & 2010 \\\hline \text { Cash } & £, 310 & £ 405 & \text { Trade payables } & £ 2,720 & £ 2,570 \\\hline \text { Accounts rec. } & 2,640 & 3,055 & \text { Notes payable } & 100 & 0 \\\hline \text { Inventory } & 3,275 & \underline{3,850} & \text { Total } & £ 2,820 & £ 2,570 \\\hline \text { Total } & £ 6,225 & £ 7,310 & \text { Non-current liabilities } & 7,875 & 8,100 \\\hline \text { Net non-current assets } & 10,960 & 10,670 & \text { Ordinary equity } & 5,000 & 5,250 \\\hline & & & \text { Retained eamings } & \underline{1,490} & 2,060 \\\hline \text { Total Assets } & £ 17,185 & £ 17,980 & \text { Total liab.\& equity } & £ 17,185 & £ 17,890 \\\hline\end{array}$

-What is the change in the net working capital from 2009 to 2010?

A)£1,235
B)£1,035
C)£1,335
D)£3,405
E)£4,740

Question 72

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$



-What is the net working capital for 2010?

A)€345
B)€405
C)€805
D)€812
E)€1,005

Question 73

Thompson's Jet Skis has operating cash flow of €218.Depreciation is €45 and interest paid is €35.A net total of €69 was paid on non-current liabilities.The firm spent €180 on non-current assets and increased net working capital by €38.What is the amount of the cash flow to shareholders?

A)-€104
B)-€28
C)€28
D)€114
E)€142

Question 74

Nabors plc
2010 Income Statement
( $£$ in millions)
$\begin{array}{|l|c|}\hline \text { Net sales } & £ 9,610 \\\hline \text { Less: Cost of goods sold } & 6,310 \\\hline \text { Less: Depreciation } & 1,370 \\\hline \text { Eamings before interest and taxes } & 1,930 \\\hline \text { Less: Interest paid } & 630 \\\hline \text { Taxable Income } & £ 1,300 \\\hline \text { Less: Taxes } & 455 \\\hline \text { Net income } & £ \quad 845 \\\hline\end{array}$

Nabors ple
2009 and 2010 Statement of financial positions
( $£$ in millions)
$\begin{array}{|l|l|l|l|l|l|}\hline & 2009 &2010 & & 2009 & 2010 \\\hline \text { Cash } & £, 310 & £ 405 & \text { Trade payables } & £ 2,720 & £ 2,570 \\\hline \text { Accounts rec. } & 2,640 & 3,055 & \text { Notes payable } & 100 & 0 \\\hline \text { Inventory } & 3,275 & \underline{3,850} & \text { Total } & £ 2,820 & £ 2,570 \\\hline \text { Total } & £ 6,225 & £ 7,310 & \text { Non-current liabilities } & 7,875 & 8,100 \\\hline \text { Net non-current assets } & 10,960 & 10,670 & \text { Ordinary equity } & 5,000 & 5,250 \\\hline & & & \text { Retained eamings } & \underline{1,490} & 2,060 \\\hline \text { Total Assets } & £ 17,185 & £ 17,980 & \text { Total liab.\& equity } & £ 17,185 & £ 17,890 \\\hline\end{array}$

-What is the amount of the net capital spending for 2010?

A)-£290
B)£795
C)£1,080
D)£1,660
E)£2,165

Question 75

Cost of goods sold $\quad\quad\quad\quad\quad£ 3,210$

Interest $\quad\quad\quad\quad\quad\quad\quad\quad\quad£ 215$

Dividends $\quad\quad\quad\quad\quad\quad\quad\quad£ 160$

Depreciation $\quad\quad\quad\quad\quad\quad\quad£ 375$

Change in retained earnings $\quad\quad£ 360$

Tax rate $\quad\quad\quad\quad\quad\quad\quad\quad\quad35 \%$

-What is the taxable income for 2010?

A)£360
B)£520
C)£640
D)£780
E)£800

Question 76

Nabors plc
2010 Income Statement
( $£$ in millions)
$\begin{array}{|l|c|}\hline \text { Net sales } & £ 9,610 \\\hline \text { Less: Cost of goods sold } & 6,310 \\\hline \text { Less: Depreciation } & 1,370 \\\hline \text { Eamings before interest and taxes } & 1,930 \\\hline \text { Less: Interest paid } & 630 \\\hline \text { Taxable Income } & £ 1,300 \\\hline \text { Less: Taxes } & 455 \\\hline \text { Net income } & £ \quad 845 \\\hline\end{array}$

Nabors ple
2009 and 2010 Statement of financial positions
( $£$ in millions)
$\begin{array}{|l|l|l|l|l|l|}\hline & 2009 &2010 & & 2009 & 2010 \\\hline \text { Cash } & £, 310 & £ 405 & \text { Trade payables } & £ 2,720 & £ 2,570 \\\hline \text { Accounts rec. } & 2,640 & 3,055 & \text { Notes payable } & 100 & 0 \\\hline \text { Inventory } & 3,275 & \underline{3,850} & \text { Total } & £ 2,820 & £ 2,570 \\\hline \text { Total } & £ 6,225 & £ 7,310 & \text { Non-current liabilities } & 7,875 & 8,100 \\\hline \text { Net non-current assets } & 10,960 & 10,670 & \text { Ordinary equity } & 5,000 & 5,250 \\\hline & & & \text { Retained eamings } & \underline{1,490} & 2,060 \\\hline \text { Total Assets } & £ 17,185 & £ 17,980 & \text { Total liab.\& equity } & £ 17,185 & £ 17,890 \\\hline\end{array}$

-What is the cash flow to creditors for 2010?

A)-£405
B)-£225
C)£225
D)£405
E)£630

Question 77

Cost of goods sold $\quad\quad\quad\quad\quad£ 3,210$

Interest $\quad\quad\quad\quad\quad\quad\quad\quad\quad£ 215$

Dividends $\quad\quad\quad\quad\quad\quad\quad\quad£ 160$

Depreciation $\quad\quad\quad\quad\quad\quad\quad£ 375$

Change in retained earnings $\quad\quad£ 360$

Tax rate $\quad\quad\quad\quad\quad\quad\quad\quad\quad35 \%$

-What are the sales for 2010?

A)£4,225
B)£4,385
C)£4,600
D)£4,815
E)£5,000

Question 78

Nabors plc
2010 Income Statement
( $£$ in millions)
$\begin{array}{|l|c|}\hline \text { Net sales } & £ 9,610 \\\hline \text { Less: Cost of goods sold } & 6,310 \\\hline \text { Less: Depreciation } & 1,370 \\\hline \text { Eamings before interest and taxes } & 1,930 \\\hline \text { Less: Interest paid } & 630 \\\hline \text { Taxable Income } & £ 1,300 \\\hline \text { Less: Taxes } & 455 \\\hline \text { Net income } & £ \quad 845 \\\hline\end{array}$

Nabors ple
2009 and 2010 Statement of financial positions
( $£$ in millions)
$\begin{array}{|l|l|l|l|l|l|}\hline & 2009 &2010 & & 2009 & 2010 \\\hline \text { Cash } & £, 310 & £ 405 & \text { Trade payables } & £ 2,720 & £ 2,570 \\\hline \text { Accounts rec. } & 2,640 & 3,055 & \text { Notes payable } & 100 & 0 \\\hline \text { Inventory } & 3,275 & \underline{3,850} & \text { Total } & £ 2,820 & £ 2,570 \\\hline \text { Total } & £ 6,225 & £ 7,310 & \text { Non-current liabilities } & 7,875 & 8,100 \\\hline \text { Net non-current assets } & 10,960 & 10,670 & \text { Ordinary equity } & 5,000 & 5,250 \\\hline & & & \text { Retained eamings } & \underline{1,490} & 2,060 \\\hline \text { Total Assets } & £ 17,185 & £ 17,980 & \text { Total liab.\& equity } & £ 17,185 & £ 17,890 \\\hline\end{array}$

-What is the operating cash flow for 2010?

A)£845
B)£1,930
C)£2,215
D)£2,845
E)£3,060

Question 79

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$


-What is the operating cash flow for 2010?

A)€143
B)€297
C)€325
D)€353
E)€367

Question 80

Knickerdoodles NV.
$\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\underline { 2009 }\quad\quad\quad\quad\quad\underline { 2010 }$


-What is net capital spending for 2010?

A)-€250
B)-€57
C)€0
D)€57
E)€477