•

CPAR
CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila
.MAS 8208
MANAGEMENT ADVISORY SERVICES

WORKING CAPITAL MANAGEMENT AND FINANCIAL STATEMENTS ANALYSIS

WORKING CAPITAL MANAGEMENT - refers to the adrainistration and control of current assets and
_zentatiabilitieseto maximize the firm's value by achieving a balance -lretweep
cun
profitability and risk
•

WORKING CAPITAL FINANCING POLICIES

I.. Matching Policy (also called selNiquktativ poky at hedging policy) - matching the maturity of a
financing source with an asset's useful life
• short-term assets are financed with short-term liabilities.
O long-term assets are funded by iong-term finandng sources

2. Conserpotive (Relaxed) Policy - operatkms are conducted with too muc i workina.sapita.b.
- involves financing almost a as zt. al lona-term capital

3. Aggressive (Restricted) Policy operations are conducted on a minimum a mount of workin

capital; uses short-tem liabilities to finance, not im-iryTerriporary, ,3tit alSC -art or all
of the permanent current asset requirement

j. 4. Balanced Policy- balances the trade-off between risk and profitability in a mariner consistent
with its attitude toward bearing risk
•
WAYS OF MINIMIZING WORKING CAPITAL REQUIREMENT
1. Managing cash and raw materials efficlentIy
2. Having efficiency in making coilections and in the manufacturing operations.
3. Implementing effective credit and colledlon policies.
4. Reducing the time lag between completion and delivery of finished goods. .
5. Seeking favorable terms fitim suppliers and oth er creditors.

FORECASTING FINANCIAL STATEMENT VARTAttLES

ASSUMPTIONS:
1. All varies . -• a*
2. The current levels of most balance sheet items are optimal for the current sales level.

STEPS:
Identify assets and liabilities that vary spontaneously with sales
2. Estimate the amount of net income that will be retained.
3. Compute the amount of External Financing Needed (EFN) by subtracting increase in
spontaneous liabilities and income retained from increase in total financing required (increase
in assets due to increase in sales).
•
EFN = AS x (SA/S0) -AS x (SL/S0) (<ROS x St> x <1 - Payout%>)
saitS
owti omatt.Cat‘y A (Apit.ii A in
-

Where: SA/S0 = percentage relationship of SIMI - variable assets) 1 to sales

at period 0, ", o f- depeAdev*--dn
wait.e.4
c,Kuiatty, cu«eni- Nes
stiso = percentage relationship ofesp ous liab ilities variable liabffities) to
sales at period 0,
•
•
CASH MANAGEMENT
• •
CASH MANAGEMENT - involves the maintenance of the appropriate level of cash and investhnent
marketable securities to meet the firm's cash requirements and to maximize
-77-
inc 0,T
ele on Idle funds.

•
 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 2 of 18

REASONS FOR HOLDING CASH

1. Transaction Purposes firms maintain cash balances that they can use to conduct the ordinary
business transactions; cash balances are needed to meet cash outflow requirements
for operational or financial obligations,
2. Compensating Balance Requirements a certain amount of cash that a firm must leave in its
checking account at all times as part of a loan agreement. These balances give
banks .dditio • •- s because they can be relent or used to satisfy reserye
"

requirements.
Precaudaaw Reserves - firms hold cash balance in order to Ilan. ex•- et I 00 0

contingenc.IP ie.10 the uncertain pattel Lof cash inflo trlows.

4. Potential Investment Opportunities excess cash reserved are allowed to build_up_imanticipation
of a fL
,.......inAte _Lag201unity such as a major capital expenditure project.
astaier
5, Speculation firms delay purchases and store up cash for use lqttL,-to take...advantage of possible
chandes in prices of materials, equipment, and securities, as well as changes in
currency exchange rates.

THE CONCEPT OF FLOAT IN CASH MANAGEMENT

Float - difference b- • 1, • " .ccount and the b. e a. a- al lows
Dalts49wFt-beeks.

TYPES OF FLOAT:

1. Mail Float - peso amount of cjistomersumts that have been mailed by a customer but
• I-
2. Processing Float - peso amount of customers' payments that have been received by the
seller e e 'ted.
-
3. Clearing Float - peso amount of customers checks that have beerposited- but n2tLyet • -
fl
cleared.

CASH MANAGEMENT STRATEGIES

1, accelerate cash collections- red ice negative (mail and processing) float
2. ccntrol (slow down) disbursements
3. reduce the need for precautionaiy cash balance

Operating Cycle - The amount of time that elapses from the point when the firm inputs materials and
labor into the production process to the point wher _josh is cQUedTote sale of
the tdçjgcds Its two components are: average age of inventories and average
collection period of receivables. When the average age of accounts payable is
subtracted fro the operating cycle, the result is call ersion cycie.

Economic Conversion Quantity (Optima! Transaction Size) -- the amount of ketable secur-itres)that
must comeri,ethla_cash (or vice versa), considering the conversion costs and
opportunity costs involved.

12 x conversion cost x annual demand —fo—

r cash
ECQ = -----
. A Opportuni ty Cost ------

Conversion Cost - the cost of converting marketable securities to cash

Opportunity Cost - the cost of holding cash rather than marketable securities (rate of intet t!st tnat can
be earnece ab`e

MARKETABLE SECURITIES

MARKETABLE SECURITIES — short term money market nstruments that can easily be • converted to
-

cash
MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 3 of 18

REASONS FOR HOL9ING MARKETABLE SECURITIES (MS):

1. MS serve a bstitute for cash (transactions, precautionary, and speculative) balances.
2. MS serve as a 1emporary investment thatields r.gNn:Lwhile funds are idle.
3. Cash is invested in MS to meet known financial obligationsst-71-6F-6§-jtax payments and loan
amortizations. I - --

RECEIVABLE MANAGEMENT

ACCOUNTS RECEIVABLE MANAGEMENT formulation and administration of plans and policies related to
sales on account and ensuring the maintenance of re:eivables at a predetermined level and their
collectibility as planned.

WAYS. OF ACCELERATING COLLECTION OF RECEIVABLES

1. Shorten credit terms.
2. Offer special discounts to customers who pay their accounts within a specified period.
3. S than:tailing time of payments from customers to the firm.
4, Minimize float, that is, reduce the time during which payments received by the firm remain
uncollected funds.

AIDS IN ANALYZING RECEIVABLES

1. Ratio of receivables to net credit sales 3. Average collection period
2. Receivable turnover 4. Aging of accounts

INVENTORY MANAGEMENT

INVENTORY MANAdiEMENT - formulation and administration of plans and policies to efficiently and
satisfactorily meet production and mercnandising requirements and minimize costs
reliative to inventories. 1

INVENTORY MODELS i •

A basic INVENTORY MODEL exists to assist in two inventory questions:

1. Fld,w many units should be ordered?
When should the units be ordered?

Economic Order Quantity - the quantity to be ordered, which minimizes the sum of the ordering and
yng costs.

7, 5 0 I C Order Quantity may be computed as follows:

sE°Q = -
17 2a
where: a I - cost of placing one order (or
ordering cost)
D - annual demand in units
k - annual costs of carrying one
unit in inventory for one year o two t.
■
OnOuici be Ginnual dery and
-

Assumptions of the BOQ Model -----

1, Demand occurs at a constant rate throlighopt the year
2 1 ead time on the receipt of the orders is conIstant.
3. The entire quantity ordered is received it one time
4. The Lint costs of the items ordered are b onstant, thus, there can be no gulp+
discounts.
5. There-are np limitationi on the size of the inventory.

When applied c.clufacturitoperations,

tn the E0Q formula may be used to compute
the EC01701171C Lot Size (ELS) ot Econ. Production Rue CEPn

where: a - set-up cost

2aD D - annual production
= •
k requirement
k annual costs of carrying one
unit in inventory for one year \
MAS 8208 WORKING CAPITAL MANAGEMENT
,
AND FINANCIAL STATEMENTS ANALYSIS Page 4 of 18

> When the E0Q figure is available, the average inventory is computed as follows:
Average Inventory
2
A When to Reorder: ,
When to reorder is • stock-out pr. # :#1. i.e., the objective is to order at a point
in time so as not to run out of stock *4 ore receiving the inventory ordered but not so
early that an excessive quantity of safety stock is maintained

Lead tirne –period between the time the Ord( !r. is placed and received .
. Noma, time usage = Normal lead time x Average usage
Safety stock = (Maximum lead time – Normal lead time) x Average usage
Reorder point if there is NO safety stock required = Normal lead time usage
{ Safety stock + Normal lead time usage
Reorder point "there is safety stock required or
Maximum lead time x Average usage

SHORT TERM FINANCING

1, ACCOUNTS PAYABLE – the a** source of ufisecured short-term financing.

a. Credit terms: credit period, cash discount, cash discount period
b. Analysis of credit terms:
• Taking the cash discount – If cash discount is to be taken, a firm stguld_patpn the last day of
the discount period.
• Giving up cash discount – If the firm has to give up the cash discount, iteshold pay_n the last
ttalthe credit '15: 1 –—

• Cost of giving up cash discount = ECD/(100% - CD)] x (360/N)

Where: CD = cash discount percentage

N = number of days payment can be delayed by giving up the cash

The above formula assumes that a firm gives up only one discount during the year If a firm
C. I inually ives up the discount during the year the annualized cost is calculated as follows:

Annualize ost of giving up cash discount = [1 (CD/(100% - CD)}360/N 1]

C . Stretching Accounts Payable: A firm should pay the hills as late as possible without damaging its
credit rating*When a firm can stretch the payment of accounts payable, the cost of foregoing
the discount is reducedL

2. Bank Loans
a. Single-payment notes – If the interest is payable upon maturity, the effective interest rate is
equal to the nominal rate.

b. Discounted Note – The effective interest rate is higher than the nominal rate.

interest
Effective interest rate = -
Principal amount--Discounted interest

! Id If the term is less than a year the interest rate is annualized.

C . Compensating Balance - an arrangement whereby a borrower is required to maintain a certain

percentage of amount borrowed as compensating balance in the current account of the
borrower. •
 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 5 of 18

ANALYSIS OF FINANCIAL. STATEMENTS

A. Importance of .tatement Analysis. The purpose of financial statement analysis ris_to_assist

statement users in predicting the future.

Three techniques ire commonly used to make comparisons and to detect trends'.
• Peso and percentage changes in financial statement items.
• Common size statementc.
-

* Ratios.
,
B. Statements in Comparative and Common-Size Form. Two basic approaches are often used to
compare financial statements between companies or between different years for the same company:
hprizontaUtrendlanalysis and vertical (common-size) analysis.
--........
1. Horizontal Analysis; pesos and percentage changes on statements - the financial stat ,ments are
placed side-by-side. Two types of comparisons can then be made.
a. Trend percentages restate a time-series of financial data in terms of a 1year. Particularly
when plotted against time, this approach allows the analyst to quickly gauge the rate and
direction of changes.
b. The difference (increase or decrease) between two statements can be shown in separate
columns in both peso and percentage forms. Showing changes in peso form helps to zero in
on key factors that have material! . • :- -.3 • • .1,- - or financial position. Showing
changes in percentage form helps to gain a feel of how unusual the changes might be.
...........___...
2. Vertical Analysis; Common-size Statements. A common-size statement is one that shows each
item as • o - - . et (le of a tot. • Ii.,-r than i 0" • rm. These kinds of statements make it
much easier to compare firms of differen and t) track balance sheet and income statement
relatio shi it in • • i. t..,.• 4 • - time as its si n es.
i
. When pr11'paring common-size statements for the balance 'sheet, the various items on the
balance s eet are typically stated as percentages of total assets.
b. When applying common-size techniques to the income statement, all items on he income
statement are usually stated as a percentage of total sales pesos. .
C:. Ratio Analysis

EXERCISES:

CD FORECASTING — As of December 31, 2017, the corporation's financial records showed the
' ce om-ant, ous
,,,, 0,
following: .
\t ar Licii, .._ A000
\Ior ,
LicAb Rai 0 .
Tot al assets P0,000,000 sc., 1.e.S WO
Current liabilities:
Notes payable P 500,000
Other current liabilities 4,000,000 4,500,000
,
, Sales 80,000,000 x 30v, t 24m

Total sales is expected to increase by 30% in 2018. The corporation is at full capacity, so its assets
must grow in proportion to projected sales. The projected after tax profit margin is 6% and the
forecasted profit retention 'ratio is 20%. 4101-
e,cto i., .4, 24,m )( 2'5* I. :,
,
Co '000
AA (4 ' r assem , A , t
, \bows/liar, a S5 'el f- - as x * o herA so"" s f ini_ 234M x 9,1. (I, ko0 ) I NTERNA1
REQUTRED: _or Variaptt 7 ki t e(
orvl — tol.to 4-. Proh‘f raCii
. . ntd : (i. 442 )
"
c ott,otit, 01r10 . - -. ,..,
What was the capital intensity ratio in 201i? How much is the corporation 's additional funds
(AFN) needed for the coming year? 4r i\i t a,52k I
1
2. . OPTIMAL TRANSACTION SIZE — Assume that the fixed cost of selling marketable securities is P20
per transaction and the interest rate co0 marketable securities is 5% per year. The company estimates
that it will make cash payments of P2 ilnillion per month.
,
REQUIRED: Compute the
a. Optimal transaction=pizer 1 2 ,t; 0-
b. the average cash ballanoe P Q)ci, 2g2
1
,

,
 MAS 8208 ' WORKING. . CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 6 of 18

C . the number of times (during the year) the company has to convert marketable
securities to cash 173.
d. the total cost of converting marketable securities to cash r3 ,4c,4
e. the total carrying cost of cash. P 3,14(04

a. OPERATING AND CASH CONVERSION CYCLES Bona Manufacturing Company (BIVIC) has an average
-

accounts receivable balance of P2,400,000, an average inventory balance of P900,000, and an average
accounts payable balance of P400,000. Its annual sales are P15,000,000 (20% of which is cash sales)
and its gross profit ratio is 40%, Annual purchases amounted to P6,400,000, 75% of which is on credit.
Assume there are 360 days in a year olgeoF Alt/ datis sc116 10 AK/woo-ice) pd : 7,2.
Clqe of Mt /0IV calec to tv11/ Prod 0 eci : gt,
u ir, &Moroi - ed _
' What is BMUS operating cycle and cash conversion cycle? °I Ag e or P/ Pa ‘ t° - 36
tot 11
/ 4. WORKING CAPITAL INVESTMENT The Alabang Corporation is a leading manufacturer of dolls
-

popularly known as "Alabang Girls". The corporation turns out 1,500 dolls_.?_c_y la . at a coi of Ph pr
doll for materials and labor. It takes the firm. 22 days to convert raw materials into a doll. Alabang
allows its customers 40 days in which to pay for the dolls, and the firm generally pays its suppliers in
30 days. ' •

a. What is the length of Alabangis ca s h conversion cycle? 32 days

(1 At a steady state in which Alabang produces 1,500 dolls a day, what amount of working capital
must it finance? P288,000
C . By what amount could Alabang reduce its working capital financing needs if it was able to
stretch its payables deferral period to 35 days? P45,000
d. Alabang's management is trying to analyze the effect of a proposed new production trocess on
the working capital investment. The new productic n process woul• a ow Alabang to decrease
its invent° Oa - * Of •eriod • S da and to increase its daily production to 1,800 dolls.

However, the new process would cause the cost of materials and labor to increase to - P7.
Assuming the change does not affect the recei ables collection period (40 days) or the
payables defentLperittLalclays , what will be the length ofthe'cashconvcrsi on the
working capital •'... • ' • a z ..' - -- - - " - - - - • co et ' • 1 a rOCeSS is implemented? 30;
378,000 A

• 5. Animatrix Incorporated currently sells on credit but offers no cash discount. The firm is considering a
,
3._pgiac
. entsash discount for payment owithinale-days. The firm's cur - it av- a • - • - e. 41 a a , ' nod is
90 days, sales at iis er year, selling price is P50,000 per film, variable-cost s
PaSA____
Y00, and the average
......_cost per film is P42,00. The firm expects that the change in credit terms
will result in a minor, increaseinesales of 40 films per mir, that 75 percent of the sales will take the ,
discogpt," and the averageacolleclicki .l a
eriod will drop to 60 days. The firm's bad debt expense is
expected to become negligible under the proposed plan. The bad debt expense is currently 0.5
percent of sales. Collection cost is normally 2% of sales. The firm's required return on equal risk
investments is 10 percent. Assume 360-days in a year.

REQUIRED: •
1. How much is the incremental contribution margin? to (goo, oo0
2. How much is the change inr tivi-trile_nDin accounts receivable? ( is - 1,0C0 /coo )
(1. x to i ....- I os , 006
3. How much is the savings capitaEcgst?(P- ii2.0,000 x to/ ,... 125, 000) ---9 14 3 44)
4. How much is the incremental collection cost? 40,006
v./ 5. How much is the savings in delinquency cost?P12,5,00 0
6. How much is the incremental discounts? C o o1,50c) gotE! , (I toso, coo)
d n i l'irw CSt t ' n Alt —cif VG
7. How much is the incremental profit from the revised policy?
M.
800,000 + 105,000 + 125,000 - 40,000 - 607,500 ---, ,3_82,F_ 6 io bat fA ow c,9 ; 4,, 1150 000
0 AR - '
. t4Pifterli- ( 5.0d )(50 t) c40 G250,006
INVENTORIES , 3(D° i•
PrOP OSt4 :: 4, co0 ,000
6. Cleo operates a health food barlthat uses a special type of ground flour in one of its high-margin
products. The bakery operates days a year. Cleo finds that she seems to order either too much
or too little special flour and asks' for your help. After some discussion, you find that she has no idea
of when or how much to order. An examination of her records and answers to further questions
reveal the following information:
 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 7 of 18

Annual usage of sp. flour 9,025 kilos

Average number o da between initiating
and receiving an order 12
Estimated cost per order P25.00

Estimated annual cost of carrying a kilo of special flour in inventory P0.50

REQUIRED:
a. Calculate the economic order quantity for flour. (450 •

b. How many orders would Cleo place under the EN policy? (1-5x •
c. Compute the annual ordering cost for the EN.r23 7.5
d. Compute the annual carrying cost for the EN. P.231.5
@ Compute the total inventory-related cost at the E0Q. pci5 (-0 At 2
f. Assume that Cleo had been purchasing 800 kilos of Eq
pr per 'order. What is the order,' ,g cost per
year under the previous policy? The annual carrying Cost? How much money does using the E0Q
policy save the company over the policy of purchasing 800 kilos per order? f 7
g. What is the reorder point? 2q7
h. Assume that Cleo desires a safety stock cushion of seven days' usage. Calculate the (a) safety
stock, (b) appropriate order point, and (c) the carrying cost
410 •32.4- •

7. Eypoljess has taken a job as production superintendent in a plant that makes, among other products,
jewelry cases. She is trying to determine how many cases to produce on each production run (EPR).
Discussions reveal that last year the plant made 15,000 such cases, and this level of demand is
expected for the coming year The setup cost of each run is P400, and the cost of carrying a case in
inventory for a year is estimated at P230.
setup , 2,130.G
REQUIRED: , Cc , "
a. Caiculate the EPR for jewelry cases and the total cost associated with it 2,i ; p5, 41 7, a
b. Recalculate -the EPR and total cost if the annual cost of carrying a case in inventory is EP10 and
the setup cost is P100. 54'7.72

78. Jelseri Company ells educational toys. One raw material that it orders is plastic. The plast: I; to .nelted
and placed in niOlds to be used for the production of various toys. Information pertaining, to the
plastic raw materi,a1 is as follows:

Econumic order quantity 150,000 pounds

Average daily usage • 10,000 pounds
Maximum daily usage 12,000 pounds
Lead time • 5 lays
REQUIRED: 1
1. What is the reorder point assuming no safety stock is carried? 10,000 x5 = 50,000
2. Should the company decide to carry safety stock, how m4ny units should that be?
(12,000 1 0,000) x 5 = 10,000
-

3. What is the reorder point assuming that safety stock is carried? 12,000 x 5 = 60,000

/9. Economic order quantity for retailer. Oiympians. Inc. operates a megastore featurin sports
merchandise. It uses an E0Q decision model to ma e inventory decisions. It is now co sidering
inventory decisions for its Los Ashkals football jerseys froduct line. This is a highly popular it m. DOta
for 2014 are as follows:

,Expected annual demand for Ashkals jerseys 7,350

Ordering cost per purchase order P200
Carrying. cost per year P6 per ijersey
Each jersey costs Olympians P40 and sells for P80. The P6 carrying cost per jersey to -r year
comprises the required return on investment of P4.80 (12% of P40 purchase price) plus *1.20‘ in
relevant insurance, handling, and theft-related costs. The average purchasing lead time i 7 days. •
Olympians is open 365 days a year
orwa
REQUIRED : 1. Calculate the E0Q . 00 jerseys A>tit
2. Calculate the numbr of orders that will be placed each year 1.1 rders 11)
3. Calculate the total c rrying cost and on lering cost per year. 2, 00; 2,100
4. Calculate the reordlr point 111 jerseys

•
 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 8 of '18

5. As stated, the average purchasing lead time is 7 days. Assume that there are times
when this lead time reaches a maximum of 10 days. How many units of safety
stock must the company have, and what should be the reorder point? 61 jerseys;
202 jerseys

/10. FOREGOING DISCOUNTS ON PURCHASES Sakana Bayad Company purchases raw materials on
terms of 2/10, net 60. A rev ew of the company's records by the owner, Mr. Sakana, revealed that
payments are usually ma. - • s days after purchases are received. When asked why the firm did not
take advantage of its discou , the bookkeeper, Mr. Tinidor de Libro replied that it costs only 2% for
these funds, whereas the ban loan would cost the firm 12 percent (Use 360 days in a year)
21/44-14G1 J.
REQUIRED: a. What mistake is de Libra making? comparMy f with 12. -i btl, t21 is Pio col oum
b. What is the real cost of riot taking advantage of the discount? ILI, G 9 7. wm Pcire '14/ e4firtjrc
C . If the firm could not borrow from the bank and was forced to resort tt tile use of
trade credit funds, what suggestion might be made to de Libro that .would
\i‘f"
w reduce the annual interest costs? 'Pay on GI, cfrt
11. COST OF BANK LOANS. King Company is negotiating with EnBank for a P2 million, one-year loan.
EnBank has offered King Company the following alternatives, Calculate the effective annual interest
rate for each alternative. Which alternative is the most attractive?
a. A 10% annual rate on a simple interest loan, with no compensating balance required and
interest due at the end of the year 1 0 ,.
b. An 7 percent annual rate on a simple interest loan, with a 20% compensating balance required
and interest due at the end of the year S. 79 .i.
C . An 8% annual rate on a discounted loan, with a 25% compensating balance. ii 'tJ
0 A 6% add-oh annual interest, payable in equal monthly installments.
1.,k(14 ' . A company obtained a short term bank loan of P10 million at an annual interest rate of 12%. As a
i0od4 condition of the loan, the company is required to maintain a 20% compensating balance in its
checking account. The checking account earns interest of 1% per —aril:Wm.- Before -the- loan was
granted, the company maintained a balance of P100,000 in its checking account. Cc moutt- tk
effective interest rate for this loan. (1.2m - 19,000)/(lar - 1.9m) = 1,181,000/8.1m= 14,58*
ancroYiesli (41. , fricOnit
FiS ANALYSIS. •

13. Kaernil Corporation reported the following figures;

2017 • 2016
Cash and cash equivalents P 2,450 P 2,094
Receivables 1,813 , 1,611
Inventory 1,324 1,060 '
Prepaid expenses JZQ9 2 120
Total current assets P 7,296 P 6,885
Other assets j5OO 15,737
Total assets .E.,112,2L,
. P2 62
Total current liabilities 7,230 8,467
Long-term liabilities 4,798 3,792
Common stock 6,568 4,363
Retained earnings 7,200
/ 6,( `Qt)
Total liabilities and equity P25,796 P22.622

Sales P20,941
Cost of sales 7,055
Operating expenses 20_65
Operating income P 6,821
Interest expense 210
Income tax
Net income Lim
Required: 1. Horizontal analysis of Kaemil's balance sheet for 2017 would report
a. cash as 9.5% of total assets c. current ratio of 1.01
, b. 17% increase in cash d. inventory turnover of 6 times
MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 9 of 18 '

2„ Vertical analysis of Kaemirs balance sheet for 2017 would report

a. cash as 99596 of total assets c. current ratio of 1.01
b. inventory turnover of 6 times d. 17% increase in cash

3. A common-size income statement for Ka mu would report (amounts rounded)

a. net income of 19% c. cost of sales at 34%
, b. sales of 100% d all of the above

4. Which statement best describes Kaemil's acid test ratio 2

a. greater than 1 c Less than 1
b. Equal to 1 de none of the above

Kaemil's inventory turnover during 2017 was (amount rounded)

6 Umes c. 8 times
b. 7 times d. not determinable from the given
data
6. During 2017, Kaemirs days' sales in receivables ratio (amounts rounded) '
a. 34 days . c. 32 days
/ b. 30 days a. 28 days

7. Which measure expresses Kaemilis times-interest-earned ratio? (amounts rounded)

a. 54.7% c. 34 times ,
b. 19 times 32 times

8. The company has 2,500 shares of common stocks outstanding. What is Kaemil's
earnings per share?
ar P1.62 c. P2.73
b. P1.75 d.. 2.63 times

Kaemills stock has traded recently around P48 per share. Use your ant,wel to
Question 8 to measure the company's price earnings ratio. (Round to the nearest
I whole number)
a. 1.01 c. 48
b. 30
, d. 78

14. A skeleton of Juan Company's income statement appears as follows (amounts in thousands):

Net sales P 7,200

Cost of goods sold 2 905
, (a) ;
Selling and admin expenses 1,830
Interest expense 990 (b)
Other expenses - 150
Income before taxes P 1,325
Income tax 533 (c)
Net income 792 (d)

Other data
Inventory turnover 3.50
Beginning inventory p850
Ending inventory P810
Rate of return on net sales 0.11 ,

REQUIRED: Complete Juan Company's income statement. 1

 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 10 of '18

15. A skeleton of Rosario Company's balance sheet appears as follows (amounts in thousands):

Cash P 75 Total current liabilities P 1,900

Receivables 685 (a) Long-term note payable 1,595 (e)
Inventories 725 Other long-term liabilities 980
Prepaid expenses 35 (b)
Total current assets 1520 (c) Stockholders' equity • _ _2_325
Plant assets net 3,280 (d)
Other assets _20_Q Total liabilities and
Total assets 2EQ stockholders' equity 6,800

Rosario's current ratio is 0.80 and its acid test ratio 0,40.

REQUIRED: Complete Rosario Company's balance sheet.

16. We are given the following information for the Coleman Machine Tools Corporation. ,

Sales (credit) - P7,200,000

Cash 300,000
Inventory 2,150,000
Current liabilities 1,400,000
Asset turnover 1.20 times
Current ratio 2.50 times
Debt-to-assets ratio 40%
Receivables turnover 8 times

Current assets are composed of cash, marketable securities, accounts receivable, and inventory.

Calculate the following balance sheet -items, -

a. Accounts receivable. 900

b. Marketable securities. 150
C . Fixed assets. 2.5M
d. Long-term debt.

17. Easter Egg and Poultry Company has P4,000,000 in assets and P3,000,000 of debt. It report
C ir- c.6r-iiDof P600,000.

a. What is the return on assets? 15 v.

b. What is the return on stockholders' equity?
If the firm has an asset turnover ratio of 5 times, what is the tmar in (return on sales)? 1/.
0,, prOfit rah 0
18. A. Zarucki of Z Company found these pieces of his average balance sheet and key ratio report in his
s—"' gerbil cage:
-

- Cash 153 ? Gross margin percentage 25%

Accounts receivable 67 ? Debt to equity ratio 0.25:1 /
Inventory 80 Current ratio 3:1
Fixed assets (net) 200 ? Inventory turnover 15 times
Current liabilities 100 Days sales in receNables 15 days
Common stock 100 (based on 360 days)
Retained earnings 300

REQUIRED: Add as much to his balance sheet as possible irom the data provided,

19. Assume that net income was P6,000. No other information is known, except the following:
Return on equity 10% Return on sales 4%
Gross margin percentage 60% income tax rate 40%
Current ratio 3:1 Return on assets 5%
Inventory turnover 4 Days sales in receivables 90
Long-term debt to equity 2:3
 ,

MAS 8208 • WORKING CAPITAL MANAGEMENT

AND FINANCIAL STATEMENTS ANALYSIS Page 11 of 18
REQUIRED: Using the preceding ratios, construct an income statement and a balance sheet with as
much detail as possible.
Sales P150,000
Cost of goods s ol ld _OAT
Gross profit I p 90,000
1
Operating expenses • _22,000
Operating income P 10,000
Income tax 4 00Q
Net income LAM
Cash • 1? 2;500 •Current liabilities P 20,000
Accounts receivable 37,500 Long-term debt 40,000
Inventoty ___23:S20. ratan/a/gibes P60,000
Total current assets P 60,000
Fixed assets' , _0,S0 Equity 60,000
Total assets ,e120„,QX Total liabilities and equity Pim000

GROSS PROFIT VARIANCE ANALYSIS

20. The president of Applejess Company, which makes a single product, requests an explanation for the
77,7. 0 SPV
•
Acital
gross profit decrease for 2017. The following information is ava ilable: Asircou
e !Alt >svv
"0°Q Sig=
2016 2017 VAR (V. I-0 vat
tqlts Pr; coo Sales P72,000 14077,760 L760 F to I 41 'YVOY SV VOr 14,400 P
Cost Pr' Ct (p)Cost of goods sold It 48,000 12.24 58,752 10, 752 u .—, 2,' fel anatysts/ cegav 1, ts2.
Gross profit 122,1QQ,(2 cv sitiv q, (00 t)
E19= 4, (1 (12 LI
voi tuvit (N) Units sold 4,000 4,800 dc.i, 207. 1 \IP 91, 752 ) cev
P.),LioOf 0.600 5
s um)
REQUIRED: Gross profit variance analysis. - vga -//, 0001
,
raw
21. The 2016 income statement of the Zalucki Company showed: cL: tNiv‘iv t.ivsot 4 ,100 p..4.
ce4 Vat I
Sales (90,500 units) P760,200 z ; clifrOOV 207
Cost Ol f goods sold 5 4%000
Gross profit BIM MD

For 2017, the management forecast a sales volume of I I to. units at a sales price ofP8.20 per
unit. For this range of activity, the vana • e cost of goods sold is estimated to be P4.80 per unit. No
fixed cost is included in the cost of goods sold.
Required: An analysis of the variation in gross profit between the two years, indicating the effects
of changes in sales prices, sales volume, cost price, and cost volume'.
SW 20,000U; SW 79,800F; CPV 20,000F; OW 47,500LI
oft
w Presented below are excerpts from the income statements of Jesse Company for the years ended
December 31, 2017 and 2016: ,
# 2016 2017 "i c' St* •

Sales P640,000 P633,600 / 09, 000 •

Cost of goods sold 00 0 371,712 422. 4122..

Gross profit 12_25§.= las.2(11.105, 20. (P00

The 2017 selling price was 10% lower than in 2016.

Required: Compute the percentage changes in units and in cost per unit.
SPV 70,40017,- S W 6,4, 000F; CPV 50,688F; CIA/ 38,400U
AA change in units = 10% increase; % change in cost per unit = 12% decrease

Other Finandal Management Topics Actkint. 130A1W

EPS.
1. Mindanao Timber 1 13are(outstanding and will report
Company currently has 3.6...11,191_1
1 ,
earning.s..2 in the current year The company is considering the issuance of 40.9AN
additional shares that will net P50 per hare to the corporation.

1
 ,

MAS 8208 r WORKING CAPITAL MANAGEMENT

AND FINANCIAL
.. . STATEMENTS
,A ANALYSIS Page 12 of 18
o rig hi• Mier iSuo :i T II ShartC, 7<il ill( dirt/
a. What is th " media dilution potential for this new stock issue? ./2. .
b. Assume the Min anao Timber Comoany can earn 10 percent on the proceeds of the stock
issue in time to include it in the current year's results. Should the new issue be undertaken
based on earnings per share? yts , 2.3 (us i )
-

C . If the 400,000 additional shares can only be issued at P30 per share and the company can
earn 5 percent on the proceeds, should the new issue be undertaken based on earnings per
share? No 4 1.,5 (t ps 4.)

2. The Spears Corporation is 412Qut.Sibac. It currently has .fter-ta , earnings of P7.5 million and
2..5.4,414eft 611ares are owned by the present stockholders (the Spears family). The new public issue
-

will represent 600,000 new shares. The new shares wili be priced to the public at P20 per share,
with a 5 percent spread on the offering price. There will also be P200,000 in out-of-pocket costs to ,
the corporation.
a. Compute the net proceeds to the Spears Corporation. 11,200,000
b. Compute the earnings per share immediately before the stock issue. 75I25 = 3
C . Compute the earnings per share immediately aft€ r the stock issue, 75/3.1 =242
I d. Determine what rate of return must be earned on the net proceeds to the corporation so
there will not be a dilution in earnings per share during the year of going publics
, 1.8m/11.2m = 16.07%
ie. Determine what rate of return must be earned on the proceeds to the corporation so there
will be a 5 percent increase in earnings per share during the year of going public.
2265m/11
.2m =2022%

, ,

WINDING UP '

WORKING CAPITAL MANAGEMENT AND FINANCIAL STATEMENTS ANALYSIS

0 Smith Company presents the following data for 2016.

Inventories, beginning of year P 310,150
Inventories , end of year . 340 I 469
Cost of Goods Sold , , 2,103,696
3 65
---------
Co“
Net Sales 8,690,150
et
The number of days sales in inventory is:
a. 65.8 ..e-: 59.1
b. 60.8 d. 58.1

2. Shaffer Company presents the following data fcr 2016. .

Net Sales, 2017 P3,007,124
Net Sales, 2016 93,247
Cost of Goods Sold, 2017 2,000,326 .
Cost of Goods Sold, 2016 1,000,120
Inventory, beginning of 2017 341,169
Inventory, end of 2017 376,526
, ,
The merchandise inventory turnover for 2017 is: .
,f1:- 5.6 c. 7.5
b. 15.6 d. 7.7

3. Ingram Dog Kennel' had the following financial statistics for 2016:
Long-term debt P400,000
(average rate of interest is 8°,-6) ‘ .
Interest expense 35,000
Net income 48,000
Income tax 46,000
Operating income 107,000 •
,
 , .

MAS 8208 WORKING CAPITAL MANAGEMENT

.
AND FINANCIAL 'STATEMENTS ANALYSIS Page 13 of 18

What is the times' interest earned for 2016?

:
a. 11.4 times 1 c. 3.1 times
b. \ 3.3 times ki: 3.7 times • , ,

4. , Jordan Manufactu mg reports the following capital structure:

,
Current liabilities P100,000,
Long-term debt 400,000.
Deferred income taxes 10,000;
Preferred stock 80,000
Common stock 100,0001
Premium on common stock 180,000;
Retained earnings 170,000

What is the debt ratio?

a. 0.48 c. 0.93
1b 049 • ' d. 0.96
•
f... The following data were gathered from the annual report of Desk Products.

Market price per share - P30.00

Number of common shares 10,000 -
Preferred stock, 5%
., P100 par P10,000 '
Common equity P140,000

• The book value p r share is

a. P3000 'P1400 .
b. P15.00 d. P13.75
,
. QUESTION NOS: 6 ROUGH 10 ARE BASED ON 7HE MILOWING INFORMATION:
, , 1
The data presented below sho actua i figures for lected accounts of McKeon Company for the
• fiscal year ended IMa 016, and selected , udge figures for the 2017 fiscal year M4Keon's
controller is in the process of reviewing the 2016 bu get. McKeon Company monitors yield oi- return
ratios using the a ,era e financial osition of the compar ,y, (Round all calculations to three decimal
places if necessary) i
5 31 17 Sal./16.
Current assets 210,000 P180,000
Noncurrent assets 275,000 . 255,000
Current liabilities '. 78,000 85,000
Long-term debt 75,000 30,000
. Cominon stock (P30 par value) 300,000 300,000
Retained earnings ' 32,000 20,000
,

Sales(all ) edit) P3. 50,000

Cost of goods sold 1160,000
Interest expense . 3,000
Income taxes (40% tax rate) . 48,000 ,'
Dividend's declared and paid in 2011 60,000
Administrati\re er.penses 67,000
.
Current Assets
51311_
,.17
Cash P 20,000 P10,000
Accounts 'ecevabfe 100,000 70,000
Inventory 70,000 80,000
Other 20,000 20,000
I 11
,
, .

.
-
 MAS 8208 WORKING CAPITAL MANAGEMENT
- AND FINANCIAL STATEMENTS ANALYSIS Page 14 of 18

' 6. McKeon Company's debt-to-total-asset ratio for 2017 is

a. 0.352 0.315 c. 0.264 d. 0.237

7. The 2017 accounts eceivable turnover for McKeon Company is

-

a. 1.882 , b. 3.500 c, 5.000 A 4.118

6. Using a 365-day year McKeon 's inventory turnover is: •

-a: 2.133 b. 2.281 c„ 1995
. d. 4.615

9. McKeon Company's total asset turnover for 2017 is

a. 0.805 15:- 0.761 c. 0.722 d. 0.348

10. The 2017 return on assets for McKeon Company is

a, 0.261 b. 0.148 52! 0.157 d. 0.166

(NESOON NOS. 11 THROUGH 17 ARE BASED ON THE FOLLOWING INFORMATION:

Duval Company is a manufacturer of industrial product and employs a calendar year?for financial
reporting purposes. These questions present severa- of Duval 's transactions during the year
Assume that total quick assets exceed total current liabilities both b - • ter each transact on
described. Further assume that Duval has positive profits during the year and a credit balance
throughout the year in its retained earnings account.

11. Payment of a trade account payable of P64,500 would L

a. Increase the current ratio but the quick ratio would not be affected.
b. Increase the quick ratio but the current ratio would not be affected,. It.
Increase both the current and quick ratios,.
d. Decrease both the current arid quick ratios.

12. The purchase of raw materials for P85,000 on open account would
a. Increase the current ratio Decrease the current ratio
b. Increase net working capita! d. Decrease net working capital

13. The collection of a current accounts receivable of P29,000 would

a. increase the current ratio
b. Decrease the current ratio and the quick ratio
C . increase the quick ratio
fik Not affect the current or quick ratios

14. Obsolete inventory of P125,000 was written off during the year This transaction
a. Decreased the quick ratio c. Increased the net working capital
b. Increased the quick ratio ,E1-_ Decreased the current ratio

15. The issuance of new shares in a five for one split of common stock
- -

Decreases the book value per share of common stock

b. Increases the book value per share of common stock ,
C . Increases total shareholders' equity
d. Decreases total shareholders' equity

I 16. The issuance of serial bonds in exchange for an office building, with the first installment of the bonds
due late this year
a. Decreases net working capital c. Decreases the current ratio
b. Decreases the quick ratio ck Affects all of the answers as indicated

/ 17. The early liquidation of a long-term note with cash affects the
a. Current ratio tc a greater degree than the quick ratio
Quick ratio to a greater degree than the current ratio
C . Current and quick ratio to the same degree
cla Current ratio but not the quick ratio
 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 15 of 18

18. The equity section of Jones Corporation's statement of financial position is presented below.
Preferred stock, 6%, P100 par P40,000,000
Common stock, P4 par 10,000,000
Additional paid-in capital 20,000,000
Retained earnings 10,000,000 '
Equity 80,000,000

The preferred stock is cumulative and non-participating. All preferred dividends have been paid, and
liquidation value is P110 per preferred share. What is the book value per share of Jones
Corporation's common stock?
a. P100 b. P16 ...e.- P14.40 . d. P4

0 Baylor Company paid out one-half of last year's earnings in dividends. This year Baylor's earnings
increased by 20%, and the amount of its dividends increased by 15%. Baylor's dividend payout ratio
for the current year is
a. 50% b. 57.5% f.,.-: 47.9% d. 78%

20. Typically, which of the following would be considered to be the most indicative of a firm's short-term
debt paying ability? !
a. working capital . f..-elcurrent ratio
b. acid test * cash ratio

22. Which of the following ratios does not represent some form of comparison between accounts in
current assets and accounts in current liabilities?
a. working capital c. current ratio
b. acid-test ratio . d. merchOndise inventory turnover
i,
6. Which of the following ratios would generally he used to measure a firm's overall li i:Li_ji
Jic , n?
C a. working capiiial • c. current ratio
b. acid -test ratiO di cash rate) I1
,
,
24, Which of the following would best indicate that the firm is carrying excess inventory'?
a. a decline in spiles
b. a decline in tile current ratio ,
C a decline in days' sales in inventory
d. stable current ratio with declining quick ratios , • ,

25. Total asset turnover measures the ability of a firm to

a. generate profits on sales c. generate sales through the use of assets 1
b. buy new assets ci. move inventory ,
1
el Return on assets cannot fall under which of the followinb circumstances?
s Net ProfiMn
t Total Asset "rum&r
.
a. decline rise '
b. rise decline
c. rise rise
d. decline decline
* I ,
27. The price/eamings ratio:
a. measures the past earning ability of the firm 1 ,
b. is a gauge of future earning power as seen by inii /estors
C . relates price to dividends
d. relates price to total net income I .

28. Which of the following ratios usually re lects investors opinions of the future prospects for the firm?
a. dividend yield I c. book value per share
b. price/earnings ratio d. earnings per share

29. Which of the following is not a measur4 of asset utilization'?

a. Inventor/ turnover ,
b. Average accounts receivable cal ion period
 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 16 of 18

C . Axed asset turnover -

d. Debt to totai assets •

6 5. What financial analysis technique would imply benchrrvarking with other firms?
a. Horizontal analysis c. Vertical analysis
b.CroFs-sectional analysis ci. Ratio analysis

p 31. In comparing the current ratios of two companies, vatly is it invalid to assume that the company with
the higher current ratio is the better company?
a. The current ratio indudes assets other than cash.
b. A high current ratio may indicate inadequate inventory on hand.
C . A high current ratio may indicate inefficient use of various assets and liabilities. -
d. The two companies may define worldng capital in different terms.

p NI
re s
. 32 Shepherd Enterprises has an ROE of 15 Percent, a debt ratio of 40 percent and a profit margin of 5
' percent The company's total assets equal P800 million. What are the company's sales? (Assume
that the company has no preferred stock.) NI is y
-if. P1,440,000,000 1() ' 7. 1:11- C. P2,400,000,000 7fia e
b. P360,000,000 A d. P120,000,000
to
Si le i40•5 7- Say/137w ---
EP o w
ets tanover of 0.25, and a profit margin of 10%. The
Deb & Co. has a debt ratio of 0.5f, a total assets
president is unhappy with the current return on equity, and he thinks it could be doubled. This could .
be accomplished (1) by increasing the profit margin to 14% and (2) increasing debt utilizetirin. *Total
asset turnover will not change. What new debt ratio, along with the 14% profit margin, is leg slued to
double the return on equity? nem .to I , 3-57. 4,r,;( . 2.g.
a. 0.75 b. 0.70 ,e; 0.65 d. 0.55
,
QUESTION NOS 34 and 35 ARE BASED ON-THE MLLOWINGINFORMA-TION: - -- -

The Dawson Corporation projects the following for the year 2016.
Earnings before interest and taxes . P35 million
Interest expense P 5 million .
Preferred stock dividends P 4 million
Common stock dividend payout ratio 30%
Common shares outstanding 2 million -
Effective corporate income tax rate 40%

p 34. The expected common stock dividend per share bli Dawson Corporation for 2016 is
a. P2.34 b. P2.70 c P1.80 d. P2.10

,11,) 35. If Dav,son Corporation's common stock is expected to trade at a price earnings ratio 1.) titiliti, tt e
market price per share (to the nearest peso) should be 2 .S CA - r t.,, 2 AA
. a. P104 b. P56 c. P72 d. P68 "-----1 T .

D. ig)
Beatnik Company has a current ratio of 2.5 and a quick ratio of 2.0. If the firm experienced P2 millipn
in sales and sustains an inventory turnover of 8,0, what are the firm's current assets?
• A. P1,000,000 B. P500,000 C. P1,500,000 D. P1,250,000

C. 37. JC Goods, Inc. has a t tal 3 v. turnover of 0_30 and a profit margin of 10%. The president is
assets
i, unhappy with the current return on assets, and he thinks it could be doubled. This could be
I, accomplished (1) by increasing the profit margin to 15% and (2) by increasing total assets turnover.
What new asset turnover ratio, along with the 15% profit margin, is required to double the return on
assets? . 0 a t: . l& X hi'
a. 35% b. 45% c, 40% d, 50%

QUESTION NOS 38 THROUGH 40 ARE BASED - ON 771E FOLLOWING INFORMATION:

,
The condensed balance sheet as of Deciember 31, 2016 of San Matias Company is given below
Figures shown by a question mark (?) may be computed from the additional information gt% ell

,
i

. ,
 MAS 8208 WORKING CAPITAL MANAGEMENT
AND FINANCIAL STATEMENTS ANALYSIS Page 17 of 18

i6 SSETS LIAB. & STOCKHOLDERS' EQUITY

Cash I P 60,000 Accounts payable P ? 90
•

Trade receivabil-net ? Current notes payable 40,000

Inventory ? Long-term payable ?16,0
Fixed assets-net, 252,000 common stock 140,1(10
Retained earnings
Total Assets P 480,000 Total L & SHE P 480,000
Additional information:
Current ratio (as of Dec. 31, 2016) 1.9 to 1
Ratio of total liabilities to total stockholders' equity 1.4
Inventory turnover based on sales and ending 15 times ..47 ggit5
inventory
Inventory turnover based on cost of goods sold and 10 times C06$'
ending inventory
Gross margin for 2016 P500,000 E
38. The balance of accounts payable of San Matias as of DOcember 31, 2016 is
a. P40,000 P80,000 c. P95,000 d. P280,000 .
39. The balance of retained earnings of San Matias as of DOcember 31 . is
ea. P60,000 b. P140,000 c, P200,000 d. P360 000

G The balance of inventory of San Matias as of December 31., 2016 is

a. P68,000 X P100,000 c, P168,000 d. P228,000

* QUESTION NOS. 41 THROUGH 44 ARE BASED ON THE '011.0WING INFORMA7TON:

La Bekha Corporation asked you to interpret the followitig ratios provided by its 'accountant
kcid-tst ratio 1.
Times interest earned 8'
Gross imargin ratio 40%
Inventory turnover 6 „,/
times
Debt to equity ratio 0.9:1 Et io,000
Ratio of operating expenses to sales 151 t A: I,710, 000

P6 0,000. Be• innin• b 1 I • n • - 1 •

b
Total stockholders e uly on December 31, 2016 was P QQQQQ. 0.ross rnargio for 2016 amoynted to
i en o : so #00. The company s long-term
Ital
Tiiii-
tias consisted of bonds payable with interest at 15%. You decided to reconstruct the ,x,rnpilny s
financial statements based on the limited information gi en to serve as basis for further analysis.

41. Operating income was computed at

a. P525,000 4.er P375,000
b. P300,000 d. Answer cannot be determined

42. Bond payable totaled

,,er. P312,500 c..1 P400,000
b. P350,000 d. Anwer cannot be determined.

43. The total current liabilities would be '

a. P462,500 i c. P504,500
#/b. P497,500 d. Answer cannot be determined,

44. The company's total current assets amunted

lif to
a, P317,000 ' )tie P697,000 b. P597,000 cl . Answer cannot be determin .

4 A company has just been taken over b new management that believes it can raise earning dbefore
taxes (EBT) from P600 to P1,000, me ely by cutting overtime pay and reducing cost of goo s sold.
Prior to the change, the following data lppried:
MAS 8208 rq s WORKING CAPITAL MANAGEMENT
00° cfici
AND FINANCIAL STATEMENTS ANALYSIS Page 18 of 18
600 et P.
ts o
Total assets: P8,000 Debt ratio: 45% 73, (000
Tax rate: 35% BEY ratio: 13.3125% it 0 v° s-• " cu

EBT: P600 Sates: P15,000

These data have been constant for several years, and all income is paid out as dividends. Sales, the
tax rate, and the balance sheet will remain constant. What is the company's cost of debt'?
12.92% b. 13.23% c. 13.51% ci. 13.75%

Etc 11. C i 21. 31.0 : 41. C

2. A 12. C 22. D 32. A 42. A
3. D 13. D 23. C 33. C 43. 8
4. B 14.D 24.D 34.D . 44.0
5. C 15. A 25. C 35. B 1 45. A
6.B 16. D 26.0 36.
7. D 17. B 27. B 37. C
8. A 18. C 28, B 38. B
9. B 19. C 29. D 39. A
10. C 20, C 30. B 40. B