1. All projects with positive NPVs should be accepted and those with negative NPVs should be rejected. Comment 2. Economic value of a company's assets corresponds to present value of asset cash flows and present value of terminal value. Comment 3. When valuing companies it is necessary at valuation date to take as disbursement investment in Net Operating Working Capital (known as NOWC). Latter is estimated as product between annual sales of current period and CTON ratio (known as NOWCR). Comment.
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
1. All projects with positive NPVs should be accepted and those with negative NPVs should be rejected. Comment
2. Economic value of a company's assets corresponds to present value of asset cash flows and present value of terminal value. Comment
3. When valuing companies it is necessary at valuation date to take as disbursement investment in Net Operating Working Capital (known as NOWC). Latter is estimated as product between annual sales of current period and CTON ratio (known as NOWCR). Comment.
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