1. Topic: Net Working Capital - Numerical calculations required
In 2013, Southwest Airlines had negative net working capital of $(1,220) million and current assets of $4,456 million. The firm's current liabilities are:
2. Topic: Balance Sheet - Numerical calculations required
The Goodyear Tire & Rubber Company's December 31, 2013 financial statements reported the following (in millions)
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Total assets
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$17,527
|
|
Total liabilities
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15,659
|
|
Total shareholders' equity
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1,868
|
|
Net income (loss)
|
675
|
|
Retained earnings, December 31, 2012
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$ 1,370
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What did Goodyear report for retained earnings at December 31, 2013?
3. Topic: Calculating ROA and ROE
Below are several financial statement items for fiscal year 2013 for two grocery chains, Whole Foods Market, an upscale organic grocer, and The Kroger Co. a mainstream grocer. ($ millions)
a. Calculate each company's return on assets (ROA) and return on equity (ROE). Comment on any differences you observe.
b. Disaggregate the ROA for each company into profit margin (PM) and asset turnover (AT). Explain why Whole Foods has a higher ROA, is it because of PM or AT or both?
|
|
Whole Foods mmarket
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The Kroger Co.
|
|
Net income
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$551
|
$1,508
|
|
Sales
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12,917
|
96,751
|
|
Average assets
|
5,416
|
24,064
|
|
Average stockholders' equity
|
3,840
|
4,090
|
4. Topic: Market to Book Value and Unrecorded Intangible Assets
Below are selected balance sheet and market data for three shoe companies. ($ millions)
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Company
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Company Year End
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Assets
|
Liabilities
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Number of shares outstanding (in millions)
|
End of year stock price (per share)
|
|
Nike, Inc.
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May 31, 2013
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17,584
|
6,428
|
894
|
$61.08
|
|
Skechers, USA, Inc.
|
Dec. 31, 2013
|
1,409
|
429
|
51
|
$33.13
|
|
Brown Shoe Company, Inc.
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Feb. 2, 2013
|
1,171
|
745
|
43
|
$16.94
|
a. Calculate the market capitalization of each company.
b. Calculate the market to book ratio for each company.