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1. Calculate the ratios Day's Sales Inventory (DSI), Day's Sales Outstanding (DSO), and Day's Payable Outstanding (DPO) and using the industry average of DSI 30 days, DSO-40 days, and DPO - 60 days, illustrate how the company is performing. (5) Program: Bachelor of Business Administration Course Title: Principles of Finance Answer the following question www (1 x 10) = 10 marks 2. The following table provides the return per year of three different stocks. Stock A Stock B Stock C 5% -10% 8% 6% 12% -3% Use the following information to answer questions Pitts Corporation -4% 5% 7% Balance Sheet Income Statement 2003 2004 2004 4% 8% 5% 7% -2% 1% ASSETS Cash and equivalents Accounts Receivable Inventory Total Current Assets 190 560 410 1,160 40% 200 600 440 1,240 Total Revenues Cost of Goods Sold Gross Profit 3,000 1,200 1,800 Operating Expenses EBITDA 33% 27% 1,000 800 Gross Fixed Assets Accumulated Depreciation Net Fixed Assets 2,200 2,600 (900) (1,200) 1,300 1,400 Given that you have limited money, and you can invest in only 1 of these stocks, using the table above, determine which stock will you invest in. Explain! (Do any necessary calculations to justify your answer). (10) Depreciation EBIT (Operating Income) 10% 17% 300 500 TOTAL ASSETS 2,460 2,640 Interest Expense EBT (Pre-tax Income) 3% 13% 100 400 40% LIABILITIES AND EQUITY Accounts Payable Notes Payable Accrued Taxes and Expenses Total Current Liabilities 285 200 140 625 160 240 300 250 150 700 Taxes Net Income Dividends Change in Retained Earnings 160 80 Long-term Debt 865 890 EPS 500 0.48 0.32 Common Stock Additional Paid-in-Capital Retained Earnings Total Shareholder's Equity 200 200 570 970 Shares Outstanding Dividends per Share 200 200 650 1,050 TOTAL LIABILITIES AND EQUITY 2460 2.640 2,460 2,640 1. Calculate the ratios Day's Sales Inventory (DSI), Day's Sales Outstanding (DSO), and Day's Payable Outstanding (DPO) and using the industry average of DSI 30 days, DSO-40 days, and DPO - 60 days, illustrate how the company is performing. (5) Program: Bachelor of Business Administration Course Title: Principles of Finance Answer the following question www (1 x 10) = 10 marks 2. The following table provides the return per year of three different stocks. Stock A Stock B Stock C 5% -10% 8% 6% 12% -3% Use the following information to answer questions Pitts Corporation -4% 5% 7% Balance Sheet Income Statement 2003 2004 2004 4% 8% 5% 7% -2% 1% ASSETS Cash and equivalents Accounts Receivable Inventory Total Current Assets 190 560 410 1,160 40% 200 600 440 1,240 Total Revenues Cost of Goods Sold Gross Profit 3,000 1,200 1,800 Operating Expenses EBITDA 33% 27% 1,000 800 Gross Fixed Assets Accumulated Depreciation Net Fixed Assets 2,200 2,600 (900) (1,200) 1,300 1,400 Given that you have limited money, and you can invest in only 1 of these stocks, using the table above, determine which stock will you invest in. Explain! (Do any necessary calculations to justify your answer). (10) Depreciation EBIT (Operating Income) 10% 17% 300 500 TOTAL ASSETS 2,460 2,640 Interest Expense EBT (Pre-tax Income) 3% 13% 100 400 40% LIABILITIES AND EQUITY Accounts Payable Notes Payable Accrued Taxes and Expenses Total Current Liabilities 285 200 140 625 160 240 300 250 150 700 Taxes Net Income Dividends Change in Retained Earnings 160 80 Long-term Debt 865 890 EPS 500 0.48 0.32 Common Stock Additional Paid-in-Capital Retained Earnings Total Shareholder's Equity 200 200 570 970 Shares Outstanding Dividends per Share 200 200 650 1,050 TOTAL LIABILITIES AND EQUITY 2460 2.640 2,460 2,640

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