The Mathematics of Money

652 Appendix A Answers to Odd-Numbered Exercises

13.^20072006 Amount Percent

Assets $4,508,000 $3,950,000 $558,000 14.13%

Liabilities $3,299,995 $3,454,000 
$154,005 
4.46%

Equity $1,208,005 $496,000 $712,005 143.55%

Total L&E $4,508,000 $3,950,000 $558,000 14.13%

15. a) ($210,975), b) can’t say, assets are not listed
    on the balance sheet at their actual market value

Chapter 12 Section 12.3

1. a) 14.89%, b) 56.57%, c) Stan is not managing
   them as well as his competition


2. $22,342.69


3. ROA 12.39%, ROE 24.94%


4. Could be doing better, since others are earning
   a higher return


5. 0.73; Cohen


6. 7 days; largely a cash business


7. Current 2.82; quick 2.05


8. Company B


9. 1.01


10. EPS $1.36; book $8.34


11. EPS
    $2.41; book $15.74


12. PE 12.90; PB 2.10


13. PE undefi ned, “NMF”; PB 3.72


14. 20.68


15. $61,471,460


16. a) High, b) high, c) high, d) low


17. Not necessarily. It depends whether the profi ts
    have grown or dropped.


18. Quick ratio


19. Price to book


20. Inventory turnover


21. 2.27

Chapter 13 Section 13.1

1. $200.00


2. $463.13


3. Not enough people to take advantage of the
   law of large numbers. Could make it work with
   reinsurance though.


4. $153.86


5. $292.00


6. $253.17


7. 125%


8. $307.16


9. Policy cancelled


10. $2,050


11. $0


12. $130,000


13. All of them


14. $95,000; $25,000


15. $225,700; $25,000

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