Mini-Case Analysis 1: Amazing Brentwood Inc.

Amazing Brentwood Inc bought a long-term asset for $100,000. The asset has a 30% CCA rate. At the end of year 5, the firm sold the asset for 25% of its original value.

In the year of 2018, The firm just paid $420 in dividends and $611 in interest expense. The addition to retained earnings is $397.74 and net new equity is $750. The tax rate is 34 percent. Sales are $6,250 and depreciation is $710.

1. Given this information, determine the value of the terminal loss or recapture at the end of the year.

2. What are the earnings before interest and taxes in the year 2018?

3. What is the after-tax net profit for the year 2018?

The company plans to efficiently maintain the assets in the long run. The average total assets of the firm are $45,000. The firm also plans to cover the solvency ratios in a reasonable manner to seek additional refinancing from the capital providers. The company has 50,000 shares outstanding. The company plans to raise more capital by issuing shares. The companys ROE has been determined to be 10% which is likely to go up in the next year. The company is concerned about the profitability ratios of the company and it is seeking your advice to improve them. The sales of the recent quarter of 2019 have gone down to $5,800 whereas the net earnings are $ 3,200.

The company is planning to expand in the future. It is planning to open one more branch in the Greater Vancouver region. The shareholders, Board of Directors (BOD) and the managers may have a disagreement on its decision though.

4. What is the Asset turnover for the company?

5. Calculate the TIE ratio and also respond whether it is satisfactory or not?

6. How will issuing more shares affect the capital structure of the company?

7. What does the firm need to do to raise its ROE?

8. Calculate the profit margin ratio of the company and comment on the profitability performance of the company.

9. What type of financial decision is the company making with the expansion?

10. The disagreement among the shareholders, BOD and the managers is popularly points to what in finance?

Extra questions, not related to the above cases and questions:

Graphically show and describe the relationship between the present value and the discount rate in the context of TVM. Give an example to justify your position.

Our Service Charter

1. Professional & Expert Writers: Homework Free only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed of papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Homework Free are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Homework Free is known for timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit in all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Homework Free, we have put in place a team of experts who answer to all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.