WMBA 507
(Sta
ucks is the company. ) Please also include the financial statements used to answer the questions. Thank you.
I. Using the corporation that you have reviewed:
A. Reconsider the Statement of Cash Flow
1. Examine the latest fiscal year statement. Utilizing this
statement, explain the choices that the company made
for that year.
2. Examine the statement of cash flow for the previous year.
Explain the choices that the company made.
For each year: what activities added to cash ? What activities utilized cash?
B. Reconsider fundamental analysis for this company
Using fundamental analysis, review the crucial ratios in the following
categories:
Liquidity
XXXXXXXXXXAsset management
XXXXXXXXXXDebt
XXXXXXXXXXInterest coverage
XXXXXXXXXXProfitability
Do an analysis of the important ratios in each category,
Compare to the previous year.
NOTES:
1. Be sure to include at least a summary of the pertinent financial
XXXXXXXXXXstatements as back-up to your analysis. These should include the
XXXXXXXXXXIncome statements, Balance sheets, and Statement of Cash Flow.
2. Show your ratio calculations (at least the set-up). Be aware of
Annualizing income statement items where necessary.
Part 2:
Application. Answer all “problems”. In each case, SHOW YOUR WORK.
1. The fieldstone flooring company series A bonds have 5 years to maturity. Interest rate is paid annually; the bonds have a $1,000 par value; and the coupon rate is 9 %.
a.What is the yield to maturity, at a cu
ent market price of $829?
.What is the yield to maturity at a market price of $1,104?
c. What would you pay for a bond if you believed that appropriate yield is 12%
2) A bond dealer purchased the following bonds with a yield to maturity of 8%. Afterwards, yields fell to 7%. Complete the table below:
Percentage Price @ 8% Price at 7% Change
10 year, 10% coupon
10 year Zero
5 year Zero
30 year Zero
3.Today you purchased a bond that matures in 5 years, with par value $1,000. The bond’s annual coupon is 8%; the cu
ent yield is 8.21%. What is it yield to maturity?
4. Bombs-Away bonds are cu
ently selling at $1,200. Their face value is $1,000, coupon is 11%, and years left to maturity is 10. The bonds are callable in five years, at 109.
a. What is the yield to maturity?
. What is the yield to call if they are called at first opportunity?