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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver

Chapter 2

Financial Statements and Cash Flows

Chapter Topics 1. Role of financial statements 2. Income statement 3. Balance sheet 4. Cash flow statement a. Interpreting information on the cash flow statement b. Consolidated statement of cash flow 5. Thomson One Financial data base 6. Additional reporting requirements 7. Reporting requirements a. Corporate financial reporting responsibilities and requirements b. Internal financial reporting c. International reporting requirements

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver

Answers to Questions 2.1 A firm’s financial activities during a period of time are described by three statements: (1) Income statement (2) Balance sheet (3) Statements of cash flow From these financial statements patterns may be discerned over time that along with business and economic analysis will help financial managers contribute to firm value maximization. 2.2 a. b. c. d. e. f. g.

CFO’s salary Telephone bill New production facility Training Advertising Research and development Computer equipment

expense expense asset expense or asset expense expense asset

2.3 The three kinds of cash flows are: Cash Flows from Operating Activities – This category includes the cash flows which results from the ordinary course of the firm’s business operations, that is, the revenues from the sale of goods less the expenses incurred and the change in the operating assets required to support the business. Cash Flows from Investing Activities – This category includes the use of cash for the firm’s capital expenditures (e.g., investment in fixed assets) and acquisitions. It would also include the cash effects of disinvestment, for example, the sale of assets. For a successful, growing firm, the net cash flows from investing activities would be negative. Cash Flows from Financing Activities – This category includes cash flow effects of paying dividends, issuing long- and/or short-term debt, paying off debt principal, and issuing or repurchasing stock.. 2.4 No. Most accounting frameworks or standards are fairly fundamental and common to all industries. However, different types of decisions for different companies/industries require different types of accounting and financial analysis. Consequently, different set of formats and accounting practices may be required.

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.5 The division that used a 15-year life on its PCs is effectively only recognizing 20% of the amount of PC-depreciation as the other divisions. The only way that this could be justified is if the equipment was still in use after 15 years. As a post script: the plants actually did have 15 year old PCs in use! 2.6 a. b. c. d. e. f.

Increase in accounts payable source Increase in inventories use Increase in accounts receivable use Decrease in deferred taxes use Capital expenditures use Dividends use

2.7 The primary external users of financial reports are:  Shareholders  Potential investors  Securities analysts  Suppliers  Employees  Labor unions  Customers  Governmental agencies, including the Securities and Exchange Commission and the Internal Revenue Service.  Local communities  Financial press 2.8 One of the major reasons to have financial statements audited by an independent public accounting firm is to facilitate the acquisition of external funds. Lenders and investors may be justifiably cautious about committing funds to an enterprise on the sole assurance by the firm’s own management that its financial condition is as represented. Public accounting firm audits may also reveal inefficient business practices which can be corrected. 2.9 For internal management purposes the dynamics of the firm’s industry may require information more frequently than by quarterly reports. Monthly financial statements are the general practice. However, some firms find it necessary to prepare either complete or relevant portions of daily financial statements. 2.10 The income statement provides more detailed information on performance than the balance sheet. Balance sheets portray results as

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver of a particular date. Income statements portray flows over specified time segments. Many management/employee compensation programs center on measures of income. 2.11 a. Sales measure performance in the market place. It can be ineffectively enhanced excessive advertising or promotions which will tend to increase the total sales level but hurt income and cash flow generation. Net income must take into account sales less the resources employed. One way of boosting income in the short-term is to reduce investment in R&D, to lower production and raw material quality standards, to eliminate advertising, and to reduce employees. While these are “quick� short-term improvements, the long term, health of the firm is negatively impacted. Total assets only measure resources employed by the firm. If the goal was to increase total assets, resources could be wasted with over investment. If the goal was to minimize assets, the company would reduce its growth, sell off its asset base, and maybe even enter into expensive alternatives arrangements to conduct its business. The change in cash and cash from operations combine the same deficiencies as an income measure and minimizing investment in assets. b. In short, if a firm focuses on anyone specific item, imbalances may result in other financial performance and long term performance may be harmed. Better measures of performance are ratios which take into income that is generated and the resources committed to generate that income. Measures such as this are discussed in chapter 7. 2.12 Modern valuation models discount cash inflows netted against cash flow requirements. Net income provides only part of the information required. Net income ignores the immediate need for asset investment or spontaneous operating financing.

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver

Problem Solutions 2.1 Income Statement Relationships. Please complete the following:

Sales Cost of goods sold Gross profit

$

A 8,000 5,700 2,300

$

B 9,000 7,200 1,800

1,700 600

1,250 550

Interest expense Pre-tax income

100 500

Income taxes Net income

200 300

Administrative expense Operating income

$

$

3.75%

Net margin (Net income / Sales)

$

C 5,000 4,200 800

$

D 6,000 4,600 1,400

$

E 4,000 3,000 1,000

250 550

1,800 (400)

400 600

10 540

(30) 580

140 (540)

70 530

225 315

230 350

(540) $

210 320

$

3.50%

$

7.00%

-9.00%

8.00%

2.2 Income Statement Relationships. Please complete the following:

Sales Cost of goods sold Depreciation Gross profit

$

A 1,000 580 120 300

B $

800 400 40 360

$

C 1,500 800 180 520

$

D 1,200 650 70 480

$

E 2,000 1,375 145 480

Selling expense Marketing expense Administrative expense Operating income

20 30 50 200

50 110 60 140

100 60 200 160

15 95 60 310

60 35 125 260

Interest expense Interest income Pre-tax income

25 15 190

5 25 160

50 5 115

68 8 250

10 10 260

75 115

70 90

45 70

100 150

100 160

Income taxes Net income Net margin (Net income / Sales)

$

11.50%

$

11.25%

$

4.67%

$

12.50%

$

8.00%

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.3 Balance Sheet Relationships. Please complete the following:

Total Assets

$

Liabilities Equity

A 1,000

$

B 1,200

$

400 800

500 500

C 1,000 650 350

2.4 Balance Sheet Relationships. Please complete the following:

Current assets Long-term assets Total assets

$

Current liabibilities Long-term liabilities Total liabilities Equity Total

$

$

$

A 2,500 2,500 5,000 1,000 1,000 2,000 3,000 5,000

$ $ $

$

B 3,500 2,000 5,500 3,000 500 3,500 2,000 5,500

$ $ $

$

C 6,000 3,000 9,000 2,500 5,500 8,000 1,000 9,000

$ $ $

$

D 5,000 3,000 8,000 3,000 2,000 5,000 3,000 8,000

$ $ $

$

E 2,000 4,000 6,000 1,500 1,500 3,000 3,000 6,000

2.5 Cash Flow Statement. Please prepare a cash flow statement from the following:

Sales Cost of sales Gross income Operating expense Operating income Interest expense Pre-tax income Income taxes Net income

Year 1 $ 5,000 3,250 1,750 1,425 325 75 250 100 $ 150

Net income Change in: Other current assets Long-term assets Current liabilities Long-term liabilities Change in Cash

Cash Other current assets Long-term assets Total assets Current liabilities Long-term liabilities Stockholders' equity Total

Year 0 $ 50 350 600 $ 1,000

Year 1 $ 80 420 650 $ 1,150

$

$

$

180 320 500 1,000

$

220 280 650 1,150

Year 1 $ 150 (70) (50) 40 (40) $

30

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.6 Cash Flow Statement.

Please prepare a cash flow statement from the following:

Year 1 8,335 5,278 145 x 2,912 1,997 915 25 940 380 $ 560 x

Sales Cost of sales Depreciation Gross income Operating expense Operating income Interest income Pre-tax income Income taxes Net income

$

Dividends

$

300

Cash Accounts receivable Inventory Total current assets Equipment, net Other assets Total assets

Year 0 Year 1 120 $ 80 240 350 350 420 710 850 1,325 1,390 250 200 $ 2,285 $ 2,440 $

Accounts payable $ Accrued liabilities Short-term debt Total current liabilities Long-term liabilities Stockholders' equity Total $

What are capital expenditures in year 1?

$

289 $ 150 600 1,039 288 958 2,285 $

374 100 395 869 353 1,218 2,440

210 *

Net income $ Depreciation Change in: Accounts receivable Inventory Other assets Accounts payable Accrued liabilities Long-term liabilities Cash flow - operations

Year 1 560 145 (110) (70) 50 85 (50) 65 675

Capital expenditures* Cash flow - investing

(210) (210)

Repayment of short-term debt Dividends Cash flow - financing

(205) (300) (505)

Change in Cash

$

(40)

* Capital expenditures are calculated as follows: Equipment, net - Beginning Balance $ + Capital Expenditures - Depreciation Equipment, net - Ending Balance Or:

1,325 ?? 145

$

1,390

Ending Balance - Beginning Balance + Depreciation $ 1,390 $ 1,325 $ 145

Capital Expenditures = $210 14


Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.7. Accounting Relationships. A. Beginning Balance - Net, PP&E + Capital expenditures - Depreciation - Equipment Disposal Ending Balance - Net, PP&E

$

B. Beginning Balance - Equity + Net Income - Dividends - Shares Repurchased Ending Balance - Equity

$

$

250 75 (45) (2) 278

$

843 78 (33) ?? 778

Shares Repurchased = $

(110)

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.8. Income Statement Preparation.

2007

Sales

$ 100,000

Cost of Goods Sold Raw Material Expense Direct Labor Manufacturing Overhead Manufacturing Depreciation Total Cost of Goods Sold Gross Income Gross Margin

38,000 14,000 6,000 7,000 65,000 A. A.

35,000 35.0%

Selling, General, and Administrative Expense Advertising Expense Promotional Expenses Research and Development Amortization of Goodwill Administrative Salaries Administrative Expense Consulting Expenses Other Administrative Expense Total Operating Expenses Earnings Before Interest and Taxes* Operating Margin

5,000 5,000 4,000 2,000 2,500 4,000 500 1,000 24,000 B. B.

11,000 11.0%

Interest Expense

3,000

Pre-Tax Income

8,000

Income Taxes (40%)

3,200

Net Income Net Margin

$

4,800 4.8%

* Earnings Before Interest and Taxes is used the same as Operating Income. C. The following items were not included on the income statement: 1. Dividend Payments are a return of capital not an expense. 2. Investment in New Plant is a cash flow that will be expensed as depreciation over the life of the new plant. 3. Receivables are a balance sheet account that represents how much money customers owe to you.

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.9 Balance Sheet Preparation. 2007 Current Assets Cash Marketable Securities Accounts Receivable Inventory Current Deferred Tax Asset Other Current Assets Total Current Assets

$

Property, Plant, and Equipment (PP&E) Land Building Equipment Office Equipment Total Gross PP&E Accumulated Depreciation Total Net PP&E

15,000 32,000 21,000 2,500 70,500 2.A.2 (34,500) 36,000

Goodwill Other Long-Term Assets Total Assets Current Liabilities Accounts Payable Accrued Liabilities Wages Payable Taxes Payable Current Portion of Long-Term Debt Total Current Liabilities

2,500 14,000 17,000 23,500 500 1,200 58,700 2.A.1

4,300 1,000 $ 100,000 2.A.3

$

14,000 9,000 3,000 4,000 1,500 31,500 2.A.4

Long-Term Debt Pension Liability Deferred Taxes Other Long-Term Liabilities Total Liabilities

5,000 23,000 13,000 2,000 74,500 2.A.5

Stockholders' Equity

25,500

Total Liabilities and Equity

$ 100,000 2.A.6

B. Net Income - Net income is the "bottom line" of the income statement and is reflected on the income statement. Indirectly, net income is capture in stockholders' equity. Depreciation Expense - Depreciation is an annual expense. It is indirectly captured on the balance sheet as an increase in accumulated depreciation. 17


Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.10. Income Statement and Balance Sheet Preparation. Income Statement Sales Cost of products sold Gross profit

$ 8,912,297 5,705,926 3,206,371 B1

Selling, general, and administrative expenses Operating profit

1,851,529 1,354,842 B2

Interest income Interest expense Asset impairment charge Other expense (income) Income from continuing operations before income taxes and cumulative effect of accounting change

27,776 232,431 73,842 17,731 1,058,614 B3

Provision for income taxes Income from continuing operations before cumulative effect of accounting change

322,792 735,822 B4

Income (loss) from discontinued oper, net of tax Income before cumulative effect of acctg change

16,877 752,699 B5

Cumulative effect of change in accounting Net Income

752,699 B6

Balance Sheet Cash and equivalents Receivables Inventories Prepaid expenses Other current assets Total current assets Land Buildings and leasehold improvements Equipment, furniture and other Total Gross, plant property, and equipment Accumulated depreciation Net, PP&E Goodwill Trademarks and other intangibles Other non-current assets Total Assets

$

$ 1,083,749 1,092,394 1,256,776 174,818 37,839 3,645,576 B7 67,000 844,056 3,111,663 4,022,719 B8 1,858,781 2,163,938 B9 2,138,499 823,227 1,806,478 $ 10,577,718 B10

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver Short-term debt Portion on long-term debt due in one year Accounts payable Salaries and wages payable Accrued marketing Other accrued liabilities Income taxes payable Total current liabilities

$

Long-term debt Long-term deferred income taxes Other long-term liabilities Shareholders' equity Total liabilities and stockholders' equity

4,121,984 508,639 757,454 2,602,573 $ 10,577,718 B12

28,471 544,798 1,181,652 55,321 270,147 376,124 130,555 2,587,068 B11

B. Complete the following tables with values from the financial statements: Income Statement 1. Gross profit 2. Operating profit 3. Income from continuing operations before income taxes and cumulative effect of accounting change 4. Income from continuing operations before cumulative effect of accounting change 5. Income before cumulative effect of acctg change 6. Net Income Balance Sheet 7. Total current assets 8. Total Gross, plant property, and equipment 9. Net, PP&E 10. Total Assets 11. Total current liabilities 12. Total liabilities and stockholders' equity

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.11. Interrelationship of the Financial Statements. The following is a consolidated balance sheet and income statement for Wal-Mart for the fiscal years ended J anuary 31, 2005 and 2006. All dollars are in millions. A. Compute the annual dollar change in each balance sheet line item (excluding totals and subtotals). Indicate if that change is a source or use of cash.

2005 Cash and Marketable Securities Accounts Receivable Inventory Prepaid Expenses and Other Total Current Assets

$

5,488 $ 1,715 29,762 1,889 38,854

Balance Sheet Changes Source Use

2006 6,414 2,662 32,191 2,591 43,858

$

-

$

926 947 2,429 702 -

Gross, Plant, Property, and Equipment Less: Accumulated Depreciation Net, Plant, Property, and Equipment

84,037 (18,637) 65,400

97,302 (21,427) 75,875

2,790 -

13,265 -

Net, Property under Capitalized Lease Other Assets and Deferred Charges

2,718 13,182

3,415 15,021

-

697 1,839

Total Assets

$ 120,154 $ 138,169

Accounts Payable Accrued Liabilities Accrued Income Taxes Commercial Paper Long-Term Debt Due in One Y ear Total Current Liabilities

$

Long-Term Debt Long-Term Debt Under Capital Leases Deferred Income Taxes and Other Shareholders' Equity Total Liabilities and Equity

Total Sources and Uses

21,987 $ 12,120 1,281 3,812 3,982 43,182

25,373 13,465 1,322 3,754 4,894 48,808

20,087 3,171 4,318 49,396

26,429 3,742 6,019 53,171

$ $

-

$

-

3,386 1,345 41 912 -

$

58 -

6,342 571 1,701 3,775

$ 120,154 $ 138,169

$

$

-

20,863 $

$

-

20,863

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver B. Table 2.3 contains the income statement for Walmart. By combining that table, along with the balance sheet from above and the information noted below, construct Walmart's cash flow statement for 2006. 2006 Other Information: Common Stock Dividend Common Stock Repurchase and Other

$

2,511 4,945

Cash Flow Statement Operating Cash Flow Net Income Addback: Depreciation Expense

$

(Increase) Decrease in Accounts Receivable (Increase) Decrease in Inventory (Increase) Decrease in Prepaid Expenses and Other (Increase) Decrease in Other Assets Increase (Decrease) in Accounts Payable Increase (Decrease) in Accrued Liabilities Increase (Decrease) in Accrued Income Taxes Increase (Decrease) in Deferred Taxes and Other Cash Flow from Operations Investing Cash Flow Capital Expenditures Net property under capitalized lease Cash Flow (Used for) Investments

(13,265) (697) (13,962)

Financing Cash Flow Repayment of Commercial Paper Issuance of Current Portion of LTD, Net Issuance of Long-Term Debt Additional Capitalized Leases Common Stock Dividends Repurchases of Common Stock Cash Flow (Used for) Financing Change in Cash - Cash Flow

11,231 2,790 14,021 (947) (2,429) (702) (1,839) 3,386 1,345 41 1,701 14,577

(58) 912 6,342 571 (2,511) (4,945) 311 $

926

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.12. Interrelationship of the Financial Statements. The following is a consolidated balance sheet for Ruby Tuesday, Inc. for the fiscal years ended May 31, 2005 and J une 1, 2004. All dollars are in thousands. A. Compute the annual dollar change in each balance sheet line item (excluding totals and subtotals). Indicate if that change is a source or use of cash. 2004 Cash and short-term investments Accounts and notes receivable Inventory - Merchandise Inventory - China, silver and supplies Income taxes receivable Deferred income taxes Prepaid expenses and other Total current assets

$

Gross, Plant, Property, and Equipment Land Building Improvements Restaurant equipment Other equipment Construction in progress Total Gross, PP&E (Totals $189,892 Use) Less: Accumulated Depreciation Net, Plant, Property, and Equipment

Goodwill Other assets

19,485 $ 10,089 8,068 5,579 2,941 3,599 11,653 61,414

Balance Sheet Changes Source Use

2005 19,787 $ 7,627 10,189 6,799 2,490 15,522 62,414

129,153 278,793 308,226 219,399 79,092 64,957 1,079,620 312,797 766,823

164,489 341,022 352,861 249,907 86,840 74,393 1,269,512 368,370 901,142

7,845 100,353

2,462 2,941 1,109 -

$

302 2,121 1,220 3,869 -

55,573 -

35,336 62,229 44,635 30,508 7,748 9,436 -

17,017

-

9,172

93,494

6,859 \

Total assets

$ 936,435 $ 1,074,067

Accounts Payable Accrued Liabilities Taxes, other than income Payroll and related costs Insurance Rent and other Current portion of long-term debt Total current liabilities

$

Long-term debt Deferred income taxes Other deferred liabilities Shareholders' equity Total liabilities and equity

Total Sources and Uses

$

$

9,173 $

-

37,416 $

46,589

13,070 18,021 6,332 19,362 518 94,719

14,461 11,826 6,335 18,276 2,326 99,813

1,391 3 1,808 -

6,195 1,086 -

168,087 46,184 110,914 516,531

247,222 50,825 112,984 563,223

79,135 4,641 2,070 46,692

-

$ 936,435 $ 1,074,067

$

-

$

-

-

$

-

$ 213,857 $ 213,857 22


Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver B. By combining the information from the balance sheet above and the information noted below construct Ruby Tuesday's cash flow statement for 2005. Other information: 1. Common stock dividend 2. Common stock repurchase and other 3. Net Income

$

2,915 52,691 102,298

Cash Flow Statement Operating Cash Flow Net income Addback: Depreciation expense

$ 102,298 55,573 157,871 (Increase) Decrease in Accounts receivable 2,462 (Increase) Decrease in Inventory - Merchandise (2,121) (Increase) Decrease in Inventory - Other (1,220) (Increase) Decrease in Income taxes receivable 2,941 (Increase) Decrease in Deferred income taxes 1,109 (Increase) Decrease in Prepaid expenses and other (3,869) (Increase) Decrease in Goodwill (9,172) (Increase) Decrease in Other assets 6,859 Increase (Decrease) in Accounts payable 9,173 Increase (Decrease) in Accrued Liabilities Increase (Decrease) in Taxes, other than income 1,391 Increase (Decrease) in Payroll and related costs (6,195) Increase (Decrease) in Insurance 3 Increase (Decrease) in Rent and other (1,086) Increase (Decrease) in Deferred income taxes 4,641 Increase (Decrease) in Other deferred liabilities 2,070 Cash Flow from Operations 164,857

Investing Cash Flow Capital expenditures Cash Flow (Used for) Investments

(189,892) (189,892)

Financing Cash Flow Additional current portion of LTD, net Issuance of long-term debt Common stock dividends Repurchases of common stock and other Cash Flow (Used for) Financing Change in Cash - Cash Flow

1,808 79,135 (2,915) (52,691) 25,337 $

302

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.13.The Hershey Company 2006 financial data will not be available until April 2007. The solution can be found on the website after that date. 2.14. $ Millions

Walmart 1/31/2006

Net Sales or Revenues $ 312,427.00 Operating Income 15,303.00 Net Income Before Extra Items/Preferred Div 11,231.00 Net Income Available to Common 11,231.00 Cash And ST Investments Receivables (Net) Total Inventories Property Plant & Equipment - Net Total Assets Total Liabilities Common Equity Depreciation, Depletion & Amortization Capital Expenditures Cash Dividends Paid - Total

Target 1/31/2006

Costco 8/31/2005

$ 52,620.00 $ 52,935.23 4,296.00 1,490.70 2,408.00 1,063.09 2,408.00 1,070.76

6,414.00 2,662.00 32,191.00 79,290.00 138,187.00

1,363.00 6,511.00 5,838.00 19,038.00 34,995.00

2,938.22 921.61 4,014.70 7,790.19 16,505.68

83,549.00 53,171.00 4,717.00 14,563.00 2,511.00

20,790.00 14,205.00 1,409.00 3,388.00 318.00

7,565.96 8,881.11 477.87 995.43 204.57

a. Target has their own credit card while Wal-Mart and Costco do not. b. Wal-Mart is approximately six times the size of Target and Costco and consequently has more invested in inventory and property plant and equipment – net.

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.15. Home Depot $ Millions 1/31/2006 Net Sales or Revenues Operating Income Net Income Before Extra Items/Preferred Div Net Income Available to Common

Lowes 1/31/2006

$ 81,511.00 9,454.00 5,838.00 5,838.00

$ 43,243.00 4,680.00 2,771.00 2,782.00

Cash And ST Investments Receivables (Net) Total Inventories Property Plant & Equipment - Net Total Assets Total Liabilities

807.00 2,396.00 11,401.00 24,901.00 44,482.00 17,573.00

876.00 18.00 6,706.00 16,354.00 24,682.00 10,343.00

Common Equity Depreciation, Depletion & Amortization Capital Expenditures Cash Dividends Paid - Total

26,909.00 1,579.00 3,881.00 857.00

14,339.00 1,051.00 3,379.00 171.00

a. Home Depot extends more credit to contractors therefore they have more receivables. b. Home Depot has almost twice as many sales as Lowes.

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver 2.16 Cake $ Millions 12/31/2005 Net Sales or Revenues Operating Income Net Income Before Extra Items/Preferred Div Net Income Available to Common

DRI 5/31/2005

$ 1,177.64 129.18 87.55 87.55

$ 5,278.11 471.59 290.61 290.61

Cash And ST Investments Property Plant & Equipment - Net Total Assets

94.27 609.92 925.92

42.80 2,351.45 2,938.45

ST Debt & Current Portion of LT Debt Long Term Debt Total Liabilities

278.22

299.93 350.32 1,664.75

Common Equity Depreciation, Depletion & Amortization Capital Expenditures Cash Dividends Paid - Total

647.70 45.14 170.16 -

1,273.69 213.22 329.24 12.51

a. Darden is comprised of Red Lobster, Olive Garden, Smokey Bones, and Bahama Breeze. b. Cheese Cake Factory has no debt which reflects a conservative and cautious management style. 2.17. The Hershey Company 2006 fourth quarter financial data will not be available until April 2007. The 2006 solution can be found on the website after that date. 2.17 The Hershey Company ($ millions) 4/3/2005 7/3/2005 10/2/2005 12/31/2005 Net Sales Net Income Cash Current Long Term Debt Long Term Debt Net Cash Provided(Used) By Operations Net Cash Provided(Used By Investing Net Cash Provided(Used) by Financing

$ 1,126.41 $ 118.22 18.06 277.68 690.31 173.78 (32.24) (178.32)

988.45 $ 1,368.24 $ 1,352.87 97.36 119.48 158.19 24.71 37.90 67.18 277.34 217.57 0.06 690.06 943.10 904.08 35.79 (100.63) 34.71

13.01 (195.83) 165.88

461.76 (238.67) (210.75)

a. Seasonality is very evident in Hershey’s business.

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Full file at http://testbank360.eu/solution-manual-strategic-financialmanagement-1st-edition-weaver b. The third and fourth quarters are the busiest, with back-to-school and Halloween in the third quarter and the holidays in the fourth quarter. c. Hershey borrows the most in the third quarter.

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Solution manual strategic financial management 1st edition weaver