CORPORATE FINANCE

REI, second year, first term, 2020-2021

1. Build a Balance Sheet starting from the following data known for a company on
December 31st 2018:
- Inventories: 100.000 RON
- Taxes Payable: 2.000 RON
- Common Stock: 50.000 RON
- Buildings and Equipment (Gross Value): 168.000 RON
- Notes Payable: 32.000 RON
- Cash: 30.000 RON
- Accumulated retained earnings: 113.000 RON
- Land: 37.000 RON
- Accounts Receivable: 250.000 RON
- Accounts Payable: 45.000 RON
- Fixed Assets Depreciation: 33.000 RON
- Bonds: 310.000 RON

2. For the above exercise compute the share of each element in Total Assets. Comment!

3. How is the equilibrium between Short Term and Long Term Made Up? Determine the
Net Working Capital Of This Firm.

4. As of December 31st 2019, the following information about the aforementioned

company is available:

- Inventories: 170.000 RON

- Taxes Payable: 2.000 RON
- Common Stock: 50.000 RON
- Buildings and Equipment (Gross Value): 192.000 RON
- Notes Payable: 39.000 RON
- Cash: 15.000 RON
- Accumulated retained earnings: 138.000 RON
- Land: 41.000 RON
- Accounts Receivable: 230.000 RON
- Accounts Payable: 50.000 RON
- Fixed Assets Depreciation: 42.000 RON
- Bonds: 327.000 RON

5. For the above exercise compute the share of each element in Total Assets. Comment!

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6. How is the equilibrium between short term and long term made up? Determine the Net
Working Capital of the company.

7. For the company considered above, compare the balance sheets for 2018 and 2019.
Determine the variation in net working capital (NWC). Comment!

HOMEWORK

1. Prepare an end of the year balance sheet using the following data:

Cash $4,000
Patents $82,000
Accounts Payable $6,000
Accounts Receivable $8,000
Taxes Payable $2,000
Machinery $34,000
Bonds $7,000
Accumulated retained earnings $25,000

If the face value of one common stocks issued by the company is $100, determine the
number of stocks issued. Determine the Net Working Capital. What is the strategy of the
company in financing its assets?