Micron Technology

Use the following information to answer items 1-3: SHOW YOUR WORK  (6.0 points)

At December 31 a company’s records show the following information:

                        Cash                                              $40,000

                        Accounts Receivable                    30,000

                        Inventory                                       50,000

                        .Prepaid Insurance                          6, 000

                        Long-term Assets                         110,000

                        Accounts Payable                           30,000

Notes Payable due in 10 months    25,000

                       Wages Payable                                 5,000

                        Long-term Liabilities                    50,000

Stockholders’ (Owner’s) Equity      106,000

                        Net Income                                     18,000

  1. Calculate the current ratio
  2. Calculate the Debt to Equity ratio
  3. Calculate the Return on Assets

Use the following information to answer items 4-5: SHOW YOUR WORK (3 points)

For its most recent year a company had Sales (all on credit) of $600,000 and Cost of Goods Sold of $200, 000. At the end of the year its Accounts Receivable amounted to $50,000 and its Inventory was $ 50,000. Accounts Payable was $5,000 and Net Income was $42,000.

  • Calculate the Accounts Receivable Turn Days
  • Calculate the Inventory Turn Days  

ACCOUNTING CONCEPTS (10.5 points)

  1. Which accounting concept does the comment below refer to?

Assets are normally shown at cost in the balance sheet, and the cost is the basis for all subsequent accounting for the asset.

 __________________________

  • Which accounting concept does the comment below refer to?

Profit is the difference between revenue and expenses not cash received and paid. Expenses are matched to revenues.

 __________________________

  • Which accounting concept does the comment below refer to?

Profit is earned (realized) at the time the goods or services are passed to the customer and the customer incurs liability for them.

___________________________

  • Which accounting assumption does the comment below refer to?

For accounting purposes the business is treated as a separate entity from the owner. The accounting records show transactions of the business not the owner.

__________________________

  • The personal assets of the owner of a company will not appear on the company’s balance sheet because of which principle/guideline?

_________________________

  • Which principle/guideline requires the company’s financial statements to have footnotes containing information that is important to users of the financial statements?

__________________________

  • A company borrowed $100,000 on December 1, 2010 and will make its only payment for interest when the note is paid off on June 1, 2011. The total interest for the six months will be $3,600. On the December 2010 income statement the accountant reported Interest Expense of $600. This action was the result of which accounting principle/guideline?

_________________________

Stock Market (9 points)

Using FINVIZ, enter the following criteria:

  1. Price = over $7
  2. Return on Equity = Over +25%
  3. Return on Investment = Over +10%
  4. Relative Volume = Over 1.5
  5. Current Ratio = Over 1.5
  6. Sector = Basic Materials

Submit the Print Screen (criteria selected) via Canvas.

Form of Organization (7.5 points)

  1. Sole-proprietor net income is exempt from social security taxes      T          F
  2. A “C” corp and  an “S” corp are not treated the same for income tax purposes        T          F
  • An advantage of an C corp is that dividends paid to shareholders are deductible by the corporation           T          F
  • A ā€œCā€ corporation passes profits and losses through to the shareholders      T          F
  • Limited Liability applies to corporations and partnerships but not a sole-proprietorship

T          F

  •  The simplest form of organization is an LLC           T          F

Tax Structures ( 9 points)

  1. The flat tax is not the same as a national sales tax     T          F
  2. Properly organized partnerships, extend limited liability to the partners           T        F 
  3. Why do proponents of the fair tax believe that prices will decline if the tax is implemented? 
  4.  What is the marginal tax rate?
  5. Which tax structure would abolish the IRS:
  6. Which tax was recently debated by the Congress:

Financial Analysis Netflix (NFLX) ā€“ (55 points)

  1. Using Yahoo Finance, access Micron Technology (MU) financial statements. Complete the financial analysis of Micron Technology for the years 2018,2017, 2016 using the financial analysis spreadsheet (include industry averages on your spreadsheet).
  2. Using Word, analyze the data over the three year period and reference the industry averages in the following areas:
    1. Staying Power
    1. Earning Power
    1. Overall efficiency ratios
    1. Working capital cycle ratios
  3. Use CSI Market.com to look up industry averages (Go, enter stock symbol, select Fundamentals. Use

Industry column to retrieve data for all ratios except Earnings Quality and Accounts Payable turnover).   

Submit via Canvas:

Financial analysis spreadsheet (include industry averages)

Financial analysis Word document

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