1.Prepare an analysis of the automobile manufacturing industry using Porter’s five forces framework. For each component force provide support for your conclusion. In addition, at the completion of your analysis provide a conclusion, along with support, of whether you expect the automobile industry to report high or low profitability in the near future.
2. Tremble Company manufactures outdoors wear for women. During 2009, the company reported the following items that affected cash.
Indicate whether each of these items is a cash flow from operating activities (O), investing activities (I), or financing activities (F).
A. Paid cash for supplies
B. Purchased equipment by paying cash
C. Collected cash on account from customers
D. Paid dividends to stockholders
E. Paid suppliers for fabric
F. Borrowed money from a bank on a long-term note
G. Paid interest to bank on the note
H. Paid wages to employees
I. Sold shares of common stock to new stockholders
3. The following selected financial data pertain to four companies: a hotel, a travel agency, a meat packing company and a pharmaceutical company.
Required: Match each with the financial information and explain why you made your choice as you did.
Balance Sheet Data
2Company 3Company 4
Property, Plant & Equipment 32.019.075.125.0
Income Statement Data
Gross Profit15.2Not ApplicableNot Applicable44.0
Profit before Taxes126.96.36.199.0
Current ratio (over the last five years)188.8.131.52.8
Inventory turnover ratio27.8Not ApplicableNot Applicable 3.4 Debt-to-equity ratio184.108.40.206.4
4. Use the current asset section of the balance sheets of the El Paso Company as of January 31, 2012 and 2011 presented below to answer the questions that follow.
Cash and cash equivalents$ 75,000$ 58,800
Trade accounts receivable, net 157,500 193,200
Inventory 208,200 253,400
Other current assets 18,400 15,500
Total current assets$ 459,100$ 520,900
(a) In the spaces provided below, complete a Percentage Change analysis of the current asset section of El Paso Company’s balance sheet for 2012, using the following format to provide your answers for the amount of dollar change and the amount of percentage change, rounding “% Change” to one decimal place, e.g., 8.3%.
Accounts$ Change% Change
(b) Provide a short evaluation of this analysis.