MGT Week 5 Knowledge check Essay

The Activity ratios help to determine the company’s ability to convert different sectors of the balance sheet into cash or sales (Potter, Libby, Libby & Short; 2010). The ratios used under this test are; Days inventory, Days Receivable, Fixed Asset Turnover, Total Asset Turnover and Days Payable.

Total asset turnover : This ratio measures the efficiency of a company’s use of its assets

Financial leverage is the ability of the company to maneuver with financing options to meet the obligations (Investopedia, 2012). There are two leverage ratios that were analyzed for this financial statement 1) debt ratio and 2) debt-to-equity ratio.

Causes of the Russian Revolution 2 - What were the causes of the Russian Revolution? (n.d.).

After Columbus mistakenly discovered the Americas in 1492, European countries were soon setting out to establish themselves in this new world. Spain was first to establish itself in the new world, using their powerful military and their navy. The new colonies were completely dictated by the king of Spain, such one of his policies allowing colonists to use the native tribes for forced labor. France was the second major power to establish itself. Their main focus was fur trapping and fur trading. The French quickly learned to work with the Native Americans. The few French settlers, who did come to America, were focused on fur trapping and trading. Because of this, most French settlements were either military forts or trading posts. England

An organization’s current ratio shows how liquid the assets of the agency are by comparison to the short term debts that the agency must pay to continue its operations. This ratio is calculated by taking the assets that can be converted to cash within a year (current assets) and dividing it by the liabilities that are either currently due or will become due within a year (current liabilities). The current ratio, ideally, should be at

Week 2 Knowledge Check Concepts Mastery Score: 12/12 Questions Strategies for SWOT Analyses 100% 1 2 3 Strategic and Operational Plans 100% 4 5 6 Differentiate Between Goals and Plans 100% 7 8 9 Examples of Contingency Factors in Planning 100% 10 11 12 Concept: Strategies for SWOT Analyses Concepts Mastery Strategies for SWOT Analyses 100% Questions 1 2 3 1. As a process of self-examination during her senior year of college, Casey decides to develop a SWOT analysis of her prospects relative to getting a job.

Which rhetorical device is used to express something in a neutral or positive manner in

Activity ratios are used to measure the relative efficiency of a firm based on its use of its assets, leverage or other balance sheet items. These ratios are important in determining whether a company's management is doing a good enough job of generating revenues, cash, etc. from its resources.

A third activity ratio is the inventory turnover ratio, which indicates the effectiveness with which the company is employing inventory. Since inventory is recorded on the balance sheet at cost (not at its sales value), it is advisable to use cost of goods sold as the measure of activity. The inventory turnover figure is calculated by dividing cost of goods sold by inventory:

The calculation of ratios is the calculation technique for analyzing a company’s financial performance that divides or standardize one accounting measure by another economically relevant measure. Financial ratios can be used as a tool to demonstrate financial statement users for making valid comparisons of firm operating performance, over time for the same firm and between comparable companies. External investors are mostly interested in gaining insights about a firm’s profitability, asset management, liquidity, and solvency.

Debt Ratio also known as the total debt ratio which is (total assets-total equity)/(total assets). The Debt Ratio looks at all debts to all creditors. Debt to Equity Ratio is the total debt/ total equity. This looks at the long-term solvency measure to look at long-term ability for the firm to pay its bills. The debt to equity ratio is calculated by dividing total liabilities by total equity. The debt to equity ratio is considered a balance sheet ratio because all of the elements are reported on the balance sheet. The debt to equity ratio for 2010 was 1.6455% and for 2009 1.289%. A debt to equity ratio of 1 would mean that investors and creditors have an equal stake in the business assets. This means that there may be a lack of performance for the reason why there ratio is close to 1.

The asset turnover ratio is a number that, “ Measures how efficiently a business uses its average total assets to generate sales” (Nobles, 2014 p637) The

Leverage is the achievement of things that would otherwise have been hard to accomplish (Bobinaite, 2015). Scholars use the time-series regression techniques to estimate the degree of leverage measures (Lord, 1998). Leverage can also be defined as the ability for a firm to use fixed cost assets (debentures and preference shares act as a fulcrum) or funds to generate more returns to its owners (Bobinaite, 2015). This will enable them to earn more than what they would using their own capital resources. If the earnings before interest and taxes exceeds the fixed return requirement then leverage is considered to be favorable (Gibson, 2013). Leverage is usually discussed in two distinct ways; operating leverage and financial leverage (Lord, 1998).

Ratio is one of several measurements to analyze the managing of the financial affairs of an organization. Ratio is simply relationship between two financial balances or the financial calculations. This relationship establishes organization’s references so business can understand how well they are performing financially. Thus, by applying ratio analysis to a set of financial statements, organization can better understand its financial performance.