Managerial Finance (2)

  

Notes:Title the work under 3 headings:1   a. Explain what working capital is  b. Provide an equation that can be used to compute it.2.  Compute the working capital for Apix.3.   Analyze the working capital of Apix.Primary Task: Write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.Apix Printing, Inc. functions in a competitive environment, namely commercial printing. Assessing and comparing the company’s performance against competitors is critical to future endeavors of expansion and issuance of equity shares. Discuss the following:Define working capital, and explain why it is important.Why would a company want to compute working capital?Using these balance sheets, ( Apex_Printing_Financial_Statements (1).pdf) compute working capital. Provide your analysis regarding working capital.Primary Task Response: Respond to the following scenario with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
apex_printing_financial_statements__1_.pdf

apex_printing_financial_statements__1_.pdf

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Apex Printing
Balance Sheets
As of December 31, 2013 and 2012
Assets
Cash
Accounts Receivable
Inventory
Total Current Assets
Land
Building & Equipment
Less: Accumulated Depreciation – Building & Equipment
Total Long Term Assets
Total Assets
000$
000$
2013
6,000
2,350
12,100
20,450
2012
5,700
2,300
6,500
14,500
25,000
20,000
300,000
300,000
(187,850) (160,000)
137,150
160,000
157,600
174,500
Liabilities and Stockholders’ Equity
Accounts Payable
Salaries Payable
Interest Payable
Short Term Notes Payable
Taxes Payable
Total Current Liabilities
4,600
0
1,500
12,000
0
18,100
3,500
2,100
0
0
5,600
11,200
Mortgate Payable
Total Long Term Liabilities
54,950
54,950
100,000
100,000
60,000
24,550
84,550
157,600
60,000
3,300
63,300
174,500
Common Stock
Retained Earnings
Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity
Apex Printing
Income Statements
For the Periods Ended December 31, 2013 and 2012
Revenue:
Less: Cost of Goods Sold
Less: Depreciation Expense
Gross Margin
Selling, General & Administrative Expenses
Income Before Interest & Taxes
Interest Expense
Income Before Taxes
Income Taxes
Net Income
000$
000$
2013
2012
450,000
475,000
(324,300) (374,500)
(27,850) (26,000)
97,850
74,500
(29,100) (32,000)
68,750
42,500
(7,500)
(6,000)
61,250
36,500
(35,000) (30,000)
26,250
6,500
Apex Printing
Statement of Cash Flows
For the Period Ended December 31, 2013
000$
Cash Flows from Operating Activities:
Net Income
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation Expense
Increase in accounts receivable
Increase in inventory
Decrease in salaries payable
Increase in interest payable
Decrease in taxes payable
Increase in Short Term notes Payable
Increase in accounts payable
Net Cash Flow from Operating Activities
Cash Flows from Investing Activities:
Cash paid to purchase land
Net Cash Flow from Investing Activities
26,250
27,850
(50)
(5,600)
(2,100)
1,500
(5,600)
12,000
1,100
55,350
(5,000)
(5,000)
Cash Flows From Financing Activities:
Cash paid for mortgage
Cash paid for dividends
Net Cash Flow from Financing Activities
Net Increase in Cash
Plus: Cash Balance at December 31, 2012
Cash Balance at December 31, 2013
(45,050)
(5,000)
(50,050)
300
5,700
6,000
Apex Printing
Balance Sheets
As of December 31, 2013 and 2012
Assets
Cash
Accounts Receivable
Inventory
Total Current Assets
Land
Building & Equipment
Less: Accumulated Depreciation – Building & Equipment
Total Long Term Assets
Total Assets
000$
000$
2013
6,000
2,350
12,100
20,450
2012
5,700
2,300
6,500
14,500
25,000
20,000
300,000
300,000
(187,850) (160,000)
137,150
160,000
157,600
174,500
Liabilities and Stockholders’ Equity
Accounts Payable
Salaries Payable
Interest Payable
Short Term Notes Payable
Taxes Payable
Total Current Liabilities
4,600
0
1,500
12,000
0
18,100
3,500
2,100
0
0
5,600
11,200
Mortgate Payable
Total Long Term Liabilities
54,950
54,950
100,000
100,000
60,000
24,550
84,550
157,600
60,000
3,300
63,300
174,500
Common Stock
Retained Earnings
Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity
Apex Printing
Income Statements
For the Periods Ended December 31, 2013 and 2012
Revenue:
Less: Cost of Goods Sold
Less: Depreciation Expense
Gross Margin
Selling, General & Administrative Expenses
Income Before Interest & Taxes
Interest Expense
Income Before Taxes
Income Taxes
Net Income
000$
000$
2013
2012
450,000
475,000
(324,300) (374,500)
(27,850) (26,000)
97,850
74,500
(29,100) (32,000)
68,750
42,500
(7,500)
(6,000)
61,250
36,500
(35,000) (30,000)
26,250
6,500
Apex Printing
Statement of Cash Flows
For the Period Ended December 31, 2013
000$
Cash Flows from Operating Activities:
Net Income
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation Expense
Increase in accounts receivable
Increase in inventory
Decrease in salaries payable
Increase in interest payable
Decrease in taxes payable
Increase in Short Term notes Payable
Increase in accounts payable
Net Cash Flow from Operating Activities
Cash Flows from Investing Activities:
Cash paid to purchase land
Net Cash Flow from Investing Activities
26,250
27,850
(50)
(5,600)
(2,100)
1,500
(5,600)
12,000
1,100
55,350
(5,000)
(5,000)
Cash Flows From Financing Activities:
Cash paid for mortgage
Cash paid for dividends
Net Cash Flow from Financing Activities
Net Increase in Cash
Plus: Cash Balance at December 31, 2012
Cash Balance at December 31, 2013
(45,050)
(5,000)
(50,050)
300
5,700
6,000

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