Question

1. Variation in Cash Flows Hasbro, Inc., designs, manufactures, and markets toy products worldwide. Hasbro's toys...

1. Variation in Cash Flows

Hasbro, Inc., designs, manufactures, and markets toy products worldwide. Hasbro's toys include Monopoly®, My Little Pony®, and Nerf brands. For a recent year, Hasbro reported the following net cash flows from operating activities (in thousands):

First quarter ending April 1 $317,789
Second quarter ending July 1 (76,938)
Third quarter ending September 30 (66,055)
Fourth quarter ending December 30 471,251

Why did Hasbro report negative net cash flows from operating activities during the second and third quarters and a large positive cash flow for the fourth quarter, with overall net positive cash flow for the year?

a.Toy manufacturers and retailers experience a seasonal trend in cash flows from operating activities.

b.Hasbro, Inc., experiences negative cash flows during the periods when merchandise is ordered and produced for the holiday season.

c.Hasbro, Inc., generates large positive cash flows during the holiday season, November–December.

d.All of these choices are correct.

2. Cash to Monthly Cash Expenses Ratio

El Dorado Inc. has monthly cash expenses of $84,000. On December 31, the cash balance is $672,000.

a. Compute the ratio of cash to monthly cash expenses.
fill in the blank 1 months

3. Cash to Monthly Cash Expenses Ratio

ABC Turbine Corporation produces and sells turbine generators for such applications as charging electric, hybrid vehicles. ABC Turbine reported the following financial data for a recent year (in thousands):

Net cash flows from operating activities $(1,452)
Cash and cash equivalents 3,146

a. Determine the monthly cash expenses.
$fill in the blank 1 thousands

b. Determine the ratio of cash to monthly cash expenses.
fill in the blank 2 months

c. Based on your analysis, do you believe that ABC Turbine will remain in business?

b. At the current rate of operations, El Dorado has a specific number of months of cash remaining. El Dorado should:

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1) All of these choices are correct.

2) Cash to Monthly Cash Expenses Ratio = Cash as of the year end / Monthly cash expenses
=672000/84000
= 8

3) a)Monthly cash expesnes = Net cashflows from operatiions / 12
=(1452)/12
=121
b)Cash to Monthly Cash Expenses Ratio = Cash as of the year end / Monthly cash expenses
=3146/121
=26
It indicates company continue its operations for 26 months which is the ample time for the company to look into strtegies and turnaround the company.

4) El Dorado can continue its operations for only 8 months. The company should reinvent itself to generae cashflows or it has to be depend on outside finances.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is...
The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Cash $60,180 $73,440 Accounts receivable (net) 92,480 99,010 Merchandise inventory 132,110 122,720 Prepaid expenses 5,380 3,720 Equipment 269,120 219,870 Accumulated depreciation-equipment (69,970) (53,920) Total assets $489,300 $464,840 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $102,750 $97,150 Mortgage note payable 0 139,450 Common stock, $1 par 16,000 10,000 Excess of paid-in capital over par 233,000...
The following data is given for DGR Company: Net cash flows from operating activities $6,000,000 Cash...
The following data is given for DGR Company: Net cash flows from operating activities $6,000,000 Cash and cash equivalents at end of year $2,700,000 DGR Company's ratio of cash to monthly cash expenses is: a.5.4 months. b.4.5 months. c.8.1 months. d.3.2 months.
Statement of Cash Flows—Direct Method The comparative balance sheet of Canace Products Inc. for December 31,...
Statement of Cash Flows—Direct Method The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows: Dec. 31, 20Y6 Dec. 31, 20Y5 Assets Cash $237,320 $220,260 Accounts receivable (net) 85,970 79,110 Inventories 242,710 234,210 Investments 0 90,740 Land 124,480 0 Equipment 267,770 207,070 Accumulated depreciation (62,690) (55,840) Total assets $895,560 $775,550 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $162,100 $152,780 Accrued expenses payable (operating expenses) 16,120 20,160 Dividends payable 8,960 6,980 Common stock,...
Schedule of Cash Payments for a Service Company EastGate Physical Therapy Inc. is planning its cash...
Schedule of Cash Payments for a Service Company EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March). The Accrued Expenses Payable balance on January 1 is $26,700. The budgeted expenses for the next three months are as follows: January February March Salaries $61,400 $74,800 $82,800 Utilities 5,100 5,600 6,700 Other operating expenses 46,700 50,900 56,000 Total $113,200 $131,300 $145,500 Other operating expenses include $3,400 of monthly depreciation expense and $800 of monthly insurance...
Schedule of Cash Payments for a Service Company EastGate Physical Therapy Inc. is planning its cash...
Schedule of Cash Payments for a Service Company EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March). The Accrued Expenses Payable balance on January 1 is $26,200. The budgeted expenses for the next three months are as follows: January February March Salaries $60,300 $73,400 $81,200 Utilities 5,000 5,500 6,600 Other operating expenses 45,800 49,900 55,000 Total $111,100 $128,800 $142,800 Other operating expenses include $3,300 of monthly depreciation expense and $800 of monthly insurance...
1. Cash Flows from Operating Activities—Indirect Method Staley Inc. reported the following data: Net income $283,600...
1. Cash Flows from Operating Activities—Indirect Method Staley Inc. reported the following data: Net income $283,600 Depreciation expense 61,800 Loss on disposal of equipment 25,900 Increase in accounts receivable 18,000 Increase in accounts payable 11,800 Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Staley Inc. Statement of Cash Flows (partial) Cash flows from...
EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March)....
EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March). The Accrued Expenses Payable balance on January 1 is $26,800. The budgeted expenses for the next three months are as follows: January February March Salaries $61,600 $75,000 $83,100 Utilities 5,100 5,600 6,700 Other operating expenses 46,800 51,000 56,200 Total $113,500 $131,600 $146,000 Other operating expenses include $3,400 of monthly depreciation expense and $800 of monthly insurance expense that was prepaid for the year on...
Schedule of Cash Payments for a Service Company EastGate Physical Therapy Inc. is planning its cash...
Schedule of Cash Payments for a Service Company EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March). The Accrued Expenses Payable balance on January 1 is $34,400. The budgeted expenses for the next three months are as follows: January February March Salaries $79,100 $96,300 $106,600 Utilities 6,500 7,200 8,600 Other operating expenses 60,900 66,400 73,100 Total $146,500 $169,900 $188,300 Other operating expenses include $4,300 of monthly depreciation expense and $1,000 of monthly insurance...
EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March)....
EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March). The Accrued Expenses Payable balance on January 1 is $31,200. The budgeted expenses for the next three months are as follows: January February March Salaries $71,800 $87,400 $96,700 Utilities 5,900 6,600 7,800 Other operating expenses 55,300 60,300 66,400 Total $133,000 $154,300 $170,900 Other operating expenses include $3,900 of monthly depreciation expense and $900 of monthly insurance expense that was prepaid for the year on...
Statement of Cash Flows—Indirect Method The comparative balance sheet of Yellow Dog Enterprises Inc. at December...
Statement of Cash Flows—Indirect Method The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Cash $62,270 $76,300 Accounts receivable (net) 95,680 102,870 Inventories 136,670 127,500 Prepaid expenses 5,570 3,860 Equipment 278,430 228,430 Accumulated depreciation-equipment (72,390) (56,020) Total assets $506,230 $482,940 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $106,310 $100,930 Mortgage note payable 0 144,880 Common stock, $1 par 16,000 10,000 Paid-in capital: Excess...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT