Financial Statement Analysis of Hollywood Fashions, California Financial Group

Question

Financial Statement Analysis

The following parts of the question are not related.

(a) Hollywood Fashions has sales of $11,500, total assets of $6,000, and a debt-equity ratio of 1.2. If its return on equity is 20 percent, what must be its net income?

(b) California Financial Group has a long-term debt ratio of 50 percent, and a current ratio of 1.75. Current liabilities are $1,600, sales are $10,500, return on equity is 20 percent and the profit margin is 10.6 percent. What is the amount of California’s net fixed assets?

(c) Maya Energy Corporation wants to maintain a growth rate of 21.73 percent per year and a debt-equity ratio of 0.5. The profit margin is 8.5 percent, and the ratio of total assets to sales is 1.25. Is the growth rate of 21.73 percent realistic? What is the retention ratio?

What is the maximum sustainable growth rate for Maya?

Summary

This question belongs to finance and discusses about financial statement analysis of various companies.

Word count: Excel Format