Making Long Term FM Decisions – Integrative Case
WRITE THIS ESSAY FOR ME
Tell us about your assignment and we will find the best writer for your paper.
Get Help Now!Introduction: As a special analytical group set up by ACME Iron by the firm’s Controller, you have been tasked to respond to the following issues raised in a meeting with the CFO.
You must look over several prospective financial strategies to aid in the successful growth of ACME Iron:Capital investment analysis; CAPM – Capital Asset Pricing Model determination for the company; WACC – Weighted Average Cost of Capital computations; EVA – Economic Value Analysis; MVA – Market Value Added; Capital structure of the company; Dividend policy; Stock repurchase and option pricing strategy; Bankruptcy risk analysis; Decision Tree Creation; Real option analysis of projects
The CFO wants to test you out on a simple project in the first task before you get into preparing items for his board presentation in subsequent tasks and projects. He wants to see how well you perform tasks as well as how accurate and thoughtful you are in your work. Details are important to him as well as good organization/presentation and communication.
Financial Statements for use on Tasks
| ACME Iron | Balance Sheet | ||
| Assets | |||
| Current assets: | 2014 | 2015 | change |
| Cash | 500,000 | 600,000 | 100,000 |
| Investments | 1,000,000 | 1,025,000 | 25,000 |
| Inventories | 110,000,000 | 117,000,000 | 7,000,000 |
| Accounts receivable | 11,750,000 | 12,500,000 | 750,000 |
| Pre-paid expenses | 2,500,000 | 2,600,000 | 100,000 |
| Other | 0 | 0 | – |
| Total current assets | 125,750,000 | 133,725,000 | 7,975,000 |
| Fixed assets: | 2014 | 2015 | change |
| Property and equipment | 165,000,000 | 175,000,000 | 10,000,000 |
| Leasehold improvements | 0 | 0 | – |
| Equity and other investments | 55,000,000 | 65,000,000 | 10,000,000 |
| Less accumulated depreciation | 15,000,000 | 15,500,000 | 500,000 |
| Total fixed assets | 235,000,000 | 255,500,000 | 20,500,000 |
| Other assets: | 2014 | 2015 | change |
| Goodwill | 75,000,000 | 70,000,000 | (5,000,000) |
| Total other assets | 75,000,000 | 70,000,000 | (5,000,000) |
| Total assets | 435,750,000 | 459,225,000 | 23,475,000 |
| Liabilities and owner’s equity | |||
| Current liabilities: | 2014 | 2015 | change |
| Accounts payable | 40,500,000 | 42,400,000 | 1,900,000 |
| Accrued wages | 85,000,000 | 90,500,000 | 5,500,000 |
| Accrued compensation | 10,000,000 | 10,855,000 | 855,000 |
| Income taxes payable | 4,024,000 | 4,697,000 | 673,000 |
| current portion of LT debt | 5,500,000 | 10,350,000 | 4,850,000 |
| Other | 0 | 0 | – |
| Total current liabilities | 145,024,000 | 158,802,000 | 13,778,000 |
| Long-term liabilities: | 2014 | 2015 | change |
| Long term debt | 125,000,000 | 130,000,000 | 5,000,000 |
| Total long-term liabilities | 125,000,000 | 130,000,000 | 5,000,000 |
| Owner’s equity: | 2014 | 2015 | change |
| Common stock | 122,000,000 | 122,000,000 | – |
| Preferred stock | 16,725,000 | 16,725,000 | – |
| Accumulated retained earnings | 27,001,000 | 31,698,000 | 4,697,000 |
| Total owner’s equity | 165,726,000 | 170,423,000 | 4,697,000 |
| Total liabilities and owner’s equity | 435,750,000 | 459,225,000 | 23,475,000 |
Income Statement
ACME Iron
December 2015
Financial Statements in ‘000s of U.S. Dollars
| REVENUE | ||
| Gross Sales | 250,000 | |
| Less: Sales Returns &
Allowances |
2,500 | |
| Net Sales | 247,500 | |
| COST OF GOODS SOLD | ||
| Beginning Inventory | 7,500 | |
| Add: Purchases | 4,500 | |
| Freight-in | – | |
| Direct Labor | 75,000 | |
| Indirect Expenses | 15,000 | |
| Inventory Available | 102,000 | |
| Less: Ending Inventory | ||
| Cost of Goods Sold | 102,000 | |
| Gross Profit (Loss) | 145,500 | |
| EXPENSES | ||
| Advertising | 7,500 | |
| Amortization | – | |
| Bad Debts | 5,000 | |
| Depreciation | 500 | |
| Dues and Subscriptions | – | |
| Employee Benefit Programs | 18,750 | |
| Insurance | 2,500 | |
| Interest | 10,350 | |
| Legal & Professional Fees | 100 | |
| Licenses & Fees | – | |
| Miscellaneous | 10 | |
| Office Expenses | 100 | |
| Payroll Taxes | 5,625 | |
| Postage | 3 | |
| Rent | – | |
| Repairs & Maintenance | 5,000 | |
| Supplies | 2,000 | |
| Telephone | 120 | |
| Travel | 1,750 | |
| Utilities | 50,000 | |
| Vehicle Expenses | 450 | |
| Wages | 25,000 | |
| Total Expenses | 134,758 | |
| Net Operating Income | 10,742 | |
| OTHER INCOME | ||
| Gain (Loss) on Sale of
Assets |
– | |
| Interest Income | 1,000 | |
| Total Other Income | 1,000 | |
| TAXES | 4,697 | |
| Net Income (Loss) | 7,045 |
Introducing our Online Essay Writing Services Agency, where you can confidently place orders for a wide range of academic assignments. Our reputable homework writing company specializes in crafting essays, term papers, research papers, capstone projects, movie reviews, presentations, annotated bibliographies, reaction papers, research proposals, discussions, and various other assignments. Rest assured, our content is guaranteed to be 100% original, as every piece is meticulously written from scratch. Say goodbye to concerns about plagiarism and trust us to deliver authentic and high-quality work.
WRITE MY ESSAY NOW
