financial management
SEE BELOW · Assume the reader has no clear understanding of finance. However, he/she is sound mathematically and has good comprehension and reasoning skills. · When writing out equations, use the Equation Editor, which can be found under the Insert Tab in Microsoft Word. · The goal is to teach the subject matter. Part I Bluerock Marketing Consulting’s 2016 and 2017 is a hypothetical company operating in the marketing industry consulting and producing for external companies. The company is anticipating a 5% increase in revenues for the year 2017. The VP of finance is asking for 3 scenarios for the income statement: · A 5% increase for 2017 · A 3% increase for 2017 · A 10% increase for 2017 Bluerock Marketing Consulting 2016 & 2017 Balance Sheet Assets Liabilities & Owner’s Equity 2016 2017 2016 2017 Current Assets Current Liabilities Cash 18,000,000 40,000,000 Accounts Payable 12,000,000 12,000,000 Accounts Receivable 22,000,000 36,000,000 Notes Payable 20,000,000 31,000,000 Inventories 24,000,000 25,000,000 Total Current Liabilities 32,000,000 43,000,000 Total Current Assets 64,000,000 101,000,000 Long Term Debt 52,000,000 62,000,000 Fixed Assets Property, Plant, Equipment 55,000,000 91,000,000 Owner’s Equity Common Stock 18,000,000 45,000,000 Retained Earnings 17,000,000 42,000,000 Total Assets 119,000,000 192,000,000 Total Liabilities & Owner’s Equity 119,000,000 192,000,000 Below you will find their balance sheet and income statements accordingly for the years 2016 and 2017: Bluerock Marketing Consulting Income Statement 2016 Net Sales $153,000,000 Cost of Goods Sold $28,000,000 Gross Income $125,000,000 Depreciation $22,360,249 EBIT $102,639,751 Interest Paid $25,000,000 Taxable Income $77,639,751 Taxes 30% $23,291,925 Net Income $54,347,826 Questions: 1. Project the income statement for Bluerock for the year 2017 using the scenarios listed above. 2. There are 5 categories of ratios (1) liquidity ratios 2) leverage ratios 3)efficiency ratio 4) profitability ratios and 5) market value ratios.) Please name and explain each category and calculate and interpret at least 3 ratios from each. 3. Create a common-size Income statement for each scenario 4. Please give a definition for each financial statement presented above: a. What is an income statement? b. What is a balance sheet? What is the Balance Sheet Identity formula? Explain the relationship between both sides of the equation Part II 1. A firm has common stock of $6,200, paid-in surplus of $9,100, total liabilities of $8,400, current assets of $5,900, and fixed assets of $21,200. What is the amount of the shareholders’ equity? Please explain the steps taken. 2. Russell’s Deli has cash of $136, accounts receivable of $95, accounts payable of $210, and inventory of $409. What is the value of the quick ratio? And explain what it is used for? 3. What is the change in the net working Read More …