return on investment
Q: Assuming that the net sales and profit remain the same, a company's return on investment would * A O…
A:
Q: Profitability Ratios:
A: Ratio: It is a number expressed in terms of another to establish relationship between them.
Q: Increase the cost and amount of assets necessary to generate each dollar of sales because it will…
A: The following options would apply: Increase the cost and amount of assets necessary to generate each…
Q: Identify three economic factors that will drive a firm’s price-earnings ratio to decrease over time
A: In case of multiple questions given it is only possible to solve one question. So solving the first…
Q: The firm's equity multiplier measures: O a. the value of assets held per dollar of shareholder…
A: Equity multiplier is also referred to as leverage ratio or financial leverage and indicates that a…
Q: Could a company’s change in NWC be negative in a given year? (Hint: Yes.) Explain how this might…
A: We begin by looking at the definitions and formula of net working capital and change in net working…
Q: Define the term self-supporting growth rate. What is Hatfield’s self-supporting growth rate? Would…
A: Self supporting growth rate is the maximum possible growth the company can exhibit in terms of its…
Q: A firm's net investment is: a. its enterprise value in excess of debt owed. O b. the market value of…
A: Solution-Company's net investmentThe total amount invested on capital assets minus the price of…
Q: Would the profit change associated with sales changes be larger or smaller if a firm increased its…
A: Operating leverage refers to fixed cost level associated to the operations of a company. A company…
Q: Is it true that A high return on assets (Ropa) is an indication that a firm has a high level/value…
A: ROA shows how profitable a company is with respect to it sassets. formula: ROA = NET INCOMETOTAL…
Q: True or False The CFROI is a measure of the dollar surplus value created by an investment or a…
A: The answer is stated below:
Q: The cost of equity is ________. a.equal to the amount of asset turnover b.the interest associated…
A: Cost of an equity is referred to as the return on the firm, which used to make the payment to their…
Q: The firm's asset turnover measures A) the value of assets held per dollar of shareholder equity.…
A: Firms assest turnover ratio:-The asset turnover ratio assesses a company's assets' ability to…
Q: If a firm wishes to retain the same return on equity when its net profit margin and total asset…
A: Net profit margin is given by profit divided by sales.So decline indicates that net income is…
Q: State if each of the following would increase or decrease AFN. A high growth rate. A low…
A: Additional Funds Needed (AFN) is that the amount of cash raised by a corporation to expand its…
Q: Which of the following is true of a leverage ratio? O It is a measure of the extent to which a…
A: Debt are a form of liabilities for the company, which it has to pay in future. Equity is the total…
Q: Which of the following is consistent with an increase in a firm's return on investment? a. an…
A: Return on Investment is the financial ratio that is used to evaluate the profitability or efficiency…
Q: Return on asset is a term often used to express income earned on capital invested in a business…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: What is the effect of an increase in the cost of capital on the payback period, profitability index…
A: The correct answer in the given question is: Payback period will not change, Profitability will…
Q: Gross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The reason for…
A: Gross profit is given by sales revenue minus cost of goods sold. Gross profit =Sales revenue- cost…
Q: A downward adjustment in a firm's payout ratio means that the firm is reinvesting a : proportion of…
A: Retention ratio refers to those portions of net income of the company which is not paid by the…
Q: rn on total assets can improve its return on equity, all else remaining the same, but A.…
A: Return on Equity (ROE) evaluates asset management, cost management, and debt management, a company…
Q: m's asset furnover measures: how efficiently the firm is utilizing its assets to generate sales. the…
A: Assets turnover ratio is sales divided by assets required for sales.
Q: Assume that a firm's total assets and sales remain constant. Would an increase in each of the ratios…
A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Which of the following generally indicates an improvement in a company’s financial position? The…
A: Financial position is defined as the current balances of the recorded the equities, liabilities, and…
Q: Choose the INCORRECT one among the following statements a) Increase in the working capital turnover…
A: Ratio analysis means where different ratio of various years of years companies has been compared and…
Q: How do flotation costs affect the cost of capital?Are these costs about the same for each of…
A: Floatation cost is the cost that company incurs while issuing new equity. It makes new equity…
Q: The business risk of a company is most accurately measured by the company's: a. Debt-to-equity…
A: Various risk is associated with business, some of them are controllable by the company while some…
Q: A company's required rate of return, typically its cost of capital, is also called the: Group of…
A: A company's required rate of return can be said to be the minimum return that investors will accept…
Q: Which one of the following is true? O The change in cash position is a linear relationship to…
A: There is no direct relation with growth sales and inventory level if production rates are compared…
Q: In the Du Pont method of analysis the two key drivers of return on equity are: a) Profit margin and…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Which of the following are assumptions of the self-supporting growth model? Check all that apply.…
A: Answer: The self-supporting rate of growth is the pace at which the company will theoretically…
Q: A firm with a below industry net profit margin can improve its return on total assets by: a.…
A: Net profit margin: Net profit margin evaluates how much net profit a firm makes per dollar of…
Q: Which of the following ratios is used to measure the profit earned on each dollar invested in a…
A: Ratio analysis helps in analyzing the performance of the firm. The investors use ratios to determine…
Q: The internal rate of return (IRR) can best be described as: A. the discount rate at which a set of…
A: It is one of capital budgeting discounting techniques which is used as a metric in financial…
Q: You're an industry analyst for the telecomm sector, and have been analyzing financial reports from…
A: Given Details Corporate tax rate is 35% To Calculate:- 1.) NOPAT 2.) Free Cash flow 3.) ROIC
Q: If the firms earns rate of return on its investments equal to the required rate of return it is…
A: The rate of return on its investments reflects the return earned on the given investment by the…
Q: Define the term capital intensity. Explain how a decline in capital intensity would affect the AFN,…
A: Introduction: Usually, capital intensity is nothing but the amount of capital that, in comparison to…
Q: A firm with a substandard net profit margin can improve its return on total assets by O increasing…
A: The ratio analysis helps to analyse the financial statements of the business with assets and…
Q: m wants to increase its working capital efficiency, it should: Increase its da
A: Introduction: Working Capital is day to day expense requirement of the organization. It is the…
Q: Which of the following ratios would best disclose effective management of working capital by a given…
A: This question deals with the which ratio shows the effective management of working capital. First…
Step by step
Solved in 2 steps
- Define the term capital intensity. Explain how a decline in capital intensity would affect the AFN, other things held constant. Would economies of scale combined with rapid growth affect capital intensity, other things held constant? Also, explain how changes in each of the following would affect AFN, holding other things constant: the growth rate, the amount of accounts payable, the profit margin, and the payout ratio.Calculate Computron’s return on invested capital (ROIC). Computron has a 10% cost of capital (WACC). What caused the decline in the ROIC? Was it due to operating profitability or capital utilization? Do you think Computron’s growth added value?Calculate Computron’s return on invested capital (ROIC). Computron has a 10% cost of capital (WACC). What caused the decline in the ROIC? Was it due to operating profitability or capital utilization? Do you think Computron’s growth added value?
- Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases?suppose a company's return on invested capital is less than its wacc. what happens to the value of operations if the sales growth increases? Explain your answerWhen the company is working at full capacity, the assets in the AFN equation is the total assets True False Considering each action independently and holding other things constant, which of the following actions would reduce a firm’s need for additional capital? a. An increase in the dividend payout ratio. b. A decrease in the days sales outstanding. c. An increase in expected sales growth. d. A decrease in the profit margin.
- Considering each action independently and holding other things constant, which of the following actions would reduce a firm’s need for additional capital? a. An increase in the dividend payout ratio. b. A decrease in the days sales outstanding. c. An increase in expected sales growth. d. A decrease in the profit margin. When the company is working at full capacity, the assets in the AFN equation is the fixed assets only True FalseWhich of the following does NOT always increase a company’s MVA? Group of answer choices: Increasing the expected growth rate of sales Decreasing the capital requirements (Capital/Sales) Decreasing the weighted average cost of capital Increasing the expected operating profitability (NOPAT/Sales) Increasing the expected rate of return on invested capitalTrue or False The CFROI is a measure of the dollar surplus value created by an investment or a portfolio of investments. The cash flow return on investment (CFROI) for a firm is the internal rate of return on existing investments, based on real cash flows. If the gross investment in existing assets is reduced, the CFROI may be increased.
- If a firm wishes to retain the same return on equity when its net profit margin and total asset turnover has declined, it must ____. a. increase its equity multiplier b. decrease its equity multiplier c. reduce sales and increase assets d. increase sales and increase assetsA firm with a below industry net profit margin can improve its return on total assets by: a. increasing its current ratio c. decreasing its fixed asset turnover b. decreasing its total asset turnover d. increasing its total asset turnoverReturn on investment can be increased by which of the following events: (a) increasing operating income (b) increasing the amount of long-term assets (c) increasing debt capital (d) decreasing revenues
