Midterm: Generally Accepted Accounting Principles and Credit Card Receivables
Name________________________ Student #_____________________
MGT 181
L. Jean Dunn, Jr.
MIDTERM EXAMINATION
1. Describe the following finance career opportunities. (5 points)
Hedge Fund Manager Manage funds for high net worth individuals, family trusts and pension funds.
Investment Banker: An intermediary who arranges the sale of stock and bonds to raise capital for corporations. Also involved in arranging mergers and acquisitions of companies.
2. Draw a typical organization chart for a corporate finance department. Possibilities may or may not include: Chief Financial Officer, Marketing Analyst, Controller, Sales Administration and Analysis, Accounting Manager, Administrative Assistant, Accounting Clerk, Treasurer, Financial Analyst, Information Technology Analyst, Manager of Human Resources, Director of R&D, Sales Manager, VP Operations and President. (6 points) | | CFO | | | | | | | | | Controller | | | Manager of | | Treasurer | | | | HR | | | Accounting | | | | Financial | Manager | | | | Analyst | | | | | | | Accounting | | | | | Clerk | | | | |
3. On the following pages are the annual financial statements of Target. Please utilize the financial statements to calculate the following: (16 points)
a) EBITDA for 2011
5,322 + 2,131 = 7,453
b) Current Ratio for January 29,2011 17,213/10,070 = 1.71
c) Gross margin as a % of sales for 2011 (exclude credit card revenues and expenses) 68,466- 47,860 = 20,606 / 68,466 = 30.1%
d) Interest Coverage ratio for 2011 (Utilize net interest expense) 7,453 / 866 = 8.61x
e) Debt to equity ratio for January 29,2011 (Utilize unsecured debt only)
11,653 / 15,487 = 75.24%
f) In dollar what was the dollar amount of common stock repurchased in 2010?
2,452
g) What is the net margin of the credit card business including non-recourse debt collateralized by credit card receivables for the year ended 2011?
MGT 181
L. Jean Dunn, Jr.
MIDTERM EXAMINATION
1. Describe the following finance career opportunities. (5 points)
Hedge Fund Manager Manage funds for high net worth individuals, family trusts and pension funds.
Investment Banker: An intermediary who arranges the sale of stock and bonds to raise capital for corporations. Also involved in arranging mergers and acquisitions of companies.
2. Draw a typical organization chart for a corporate finance department. Possibilities may or may not include: Chief Financial Officer, Marketing Analyst, Controller, Sales Administration and Analysis, Accounting Manager, Administrative Assistant, Accounting Clerk, Treasurer, Financial Analyst, Information Technology Analyst, Manager of Human Resources, Director of R&D, Sales Manager, VP Operations and President. (6 points) | | CFO | | | | | | | | | Controller | | | Manager of | | Treasurer | | | | HR | | | Accounting | | | | Financial | Manager | | | | Analyst | | | | | | | Accounting | | | | | Clerk | | | | |
3. On the following pages are the annual financial statements of Target. Please utilize the financial statements to calculate the following: (16 points)
a) EBITDA for 2011
5,322 + 2,131 = 7,453
b) Current Ratio for January 29,2011 17,213/10,070 = 1.71
c) Gross margin as a % of sales for 2011 (exclude credit card revenues and expenses) 68,466- 47,860 = 20,606 / 68,466 = 30.1%
d) Interest Coverage ratio for 2011 (Utilize net interest expense) 7,453 / 866 = 8.61x
e) Debt to equity ratio for January 29,2011 (Utilize unsecured debt only)
11,653 / 15,487 = 75.24%
f) In dollar what was the dollar amount of common stock repurchased in 2010?
2,452
g) What is the net margin of the credit card business including non-recourse debt collateralized by credit card receivables for the year ended 2011?