B/S Leverage: LEVERAGE 2020 2019 2017 Debt/Total Capital 150.2% 2018 Debt/EBITDA 2.02x 6.3x 2.9x 89.0% 1.82x 8.4x 3.1x 41.9% 0.76x 44.7x 3.8x Times Interest Earned Fixed Charge Coverage 251.4% 3.75x 3x 1.9x a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat Company AND provide two different and separate reasons why this might have happened. b. Based on these leverage ratios, what do you believe the outlook is for this company in two years (2022)? Please answer both the questions

B/S Leverage: LEVERAGE 2020 2019 2017 Debt/Total Capital 150.2% 2018 Debt/EBITDA 2.02x 6.3x 2.9x 89.0% 1.82x 8.4x 3.1x 41.9% 0.76x 44.7x 3.8x Times Interest Earned Fixed Charge Coverage 251.4% 3.75x 3x 1.9x a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat Company AND provide two different and separate reasons why this might have happened. b. Based on these leverage ratios, what do you believe the outlook is for this company in two years (2022)? Please answer both the questions

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 21SP: Begin with the partial model in the file Ch02 P21 Build a Model.xlsx on the textbooks Web site. a....

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B/S Leverage: LEVERAGE 2020 2019 2017 Debt/Total Capital 150.2% 2018 Debt/EBITDA 2.02x 6.3x 2.9x 89.0% 1.82x 8.4x 3.1x 41.9% 0.76x 44.7x 3.8x Times Interest Earned Fixed Charge Coverage 251.4% 3.75x 3x 1.9x a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat Company AND provide two different and separate reasons why this might have happened. b. Based on these leverage ratios, what do you believe the outlook is for this company in two years (2022)?
Return on Capital Employed (ROCE) = For Riccarton PLC: ROCE = 50000/380000 X 100 = 13.2% For Edinburgh PLC: ROCE = 45000/230000 X 100 = 19.6% Current Ratio = Current assets/current liabilities For Riccarton PLC: Current ratio = 150/120 = 1.25 For Edinburgh PLC: Current ratio = 80/70 = 1.14 Gearing Ratio = (long term borrowing + short term borrowings) / equity For Riccarton PLC: Gearing ratio = (180 + 100)/200 = 1.4 For Edinburgh PLC: Gearing ratio = (100 + 50)/130 = 1.15 Price/Earnings (P/E) Ratio = Share price / earnings per share For Riccarton PLC: P/E Ratio = 195/35 =5.57 For Edinburgh PLC: P/E Ratio = 451/28 = 16.107 Based on the above ratios explain, which company George H. and James W. should invest in. You should also briefly discuss the limitations of your analysis.
LiabilitiesOMRAssetsOMRShare capital400,000Land and building280,000Net profit60,000Plant and machinery700,000General reserve80,000Stock400,000Debentures840,000Debtors200,000Creditors200,000Bills receivables20,000Bills payable100,000Cash80,000Total1,680,000Total1,680,000 1>calculate total current liabilites 2>calculate total Current assets
Q18 If the company’s EBIT is OMR 500,000; market value of the equity is OMR 2,000,000 and value of Debt is OMR 4,000,000; then what is the overall cost of capital of the firm under Net Income Approach? a. 12.5% b. 10% c. 25% d. 8.33%
Q 04: Required: Calculate the value of Firm and WACC for the following capital structures EBIT of Firm. 250,000 Ke = 11% Kd = 7% Debt capital Rs. 500,000 Debt = Rs. 700,000 Debt =Rs. 200,000 Particulars Case 1 Case 2 Case 3 EBIT 250,000 250,000 250,000 (-) Interest 30,000 42,000 12,000 EBT 220,000 208,000 238,000 Ke 10% 10% 10% Value of Equity 22,00,000 208,0000 2380,000 (EBT / Ke) Value of Debt 500,000 700,000 200,000 Total Value of Firm 2,700,000 2,780,000 2,580,000 WACC (EBIT / Value) * 100
Assume the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 million; rD = 6%; rE = 12%; and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC): Multiple Choice A) 10.5% B) 10.05% C) 15% D) 9.45%
balance sheet 20201231 (mkr): fixed assets 9540 current assets 2630 s: a assets. 1280 equity 2070 long loans 5650 short-term. liabilities. 4360 s: a EQ and liabilities 12080 Let us assume that a new share issue is carried out where the owners invest SEK 1,400 million. The money is then used to repay long-term loans of SEK 900 million and short-term liabilities of SEK 400 million. Your task is to fill in the amounts for the following items in the balance sheet after the new share issue and associated transactions described above have been completed: S assets:mkr Equity:mkr Short loans:mkr
Begin with the partial model in the file Ch02 P21 Build a Model.xlsx on the textbooks Web site. a. Using the financial statements shown here for Lan Chen Technologies, calculate net operating working capital, total net operating capital, net operating profit after taxes, free cash flow, and return on invested capital for 2020. The federal-plus-state tax rate is 25%. b. Assume there were 15 million shares outstanding at the end of 2019, the year-end closing stock price was 65 per share, and the after-tax cost of capital was 10%. Calculate EVA and MVA for 2020. Lan Chen Technologies: Income Statements for Year Ending December 31 (Millions of Dollars) Lan Chen Technologies: December 31 Balance Sheets (Thousands of Dollars)
Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following: DO IT IN EXCELa. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.
A3) Finance From the information below, select the capital structure that results in the lowest WACC for Humungo Sportainment Industries. Rd below is after tax. a. Debt = 0%; Equity = 100%; Stock Price = $16.00; Rd = 6.60% b. Debt = 20%; Equity = 80%; Stock Price = $16.25; Rd = 7.00% c. Debt = 40%; Equity = 60%; Stock Price = $16.50; Rd = 7.60% d. Debt = 50%; Equity = 50%; Stock Price = $16.75; Rd = 8.40% e. Debt = 60%; Equity = 40%; Stock Price = $16.00; Rd = 9.40%
$1897 mibns 000,0062 sw I Y al coles a bl 6) The Kaufmann Group is considering a $364,000 investment with the following net cash flows. Kauffman requires a 12% return on its investments. Annual Net Cash Flows Present Value of $1 at 12% Initial investment 1.0000 Year 1 $ 124,000 0.8929 Year 2 84,000 0.7972 Year 3 144,000 0.7118 Year 4 s istos bas 000,00 254,000 svenistot 008,20 0.6355 by Year 5 74,000 0.5674 The present value of this investment is: A) B) C) D) E) $483,588. $161,576. $119,588. $230,308. $281,005.
Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following:a. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.