What is the meaning of each financial ratio?
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What is the meaning of each financial ratio?
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- Assume the following ratios areconstant: Total asset turnover 2.8Profit margin 6.8 % Equitymultiplier 2 Payout ratio 30 %What is the sustainable growthrate? (Do not round intermediate Training calcwhich one is correct please confirm? QUESTION 12 Given the following financial data for Cosmos, compute the firm's degree of combined leverage. 2010 2011 Sales $780,000 $874,000 Fixed costs 195,000 218,500 Variable costs 460,200 524,400 EBIT 124,800 131,100 Interest 46,800 52,400 EPS $0.42 $0.51 a. –2.15 b. $0.42 c. 8.37 d. 1.78If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on equity? Multiple Choice 0.1163 0.1401 0.6492 0.5389
- Requirement 1. If SnowDreams cannot reduce its costs, what profit will it earn? State your answer in dollars and as a percent of assets. Will investors be happy with the profit level? Complete the following table to calculate SnowDreams' projected income. Revenue at market price Less: Total costs Operating incomeRevenue-based valuation for the valuation of an automotive companythe reduced cash flow method will be applied from its methods. Company weightedbelow is information about determining the average cost of capital (r) shared:* 60% of the company's capital consists of equity, while the rest of the capital40% was obtained by financial borrowing.* The borrowing cost of the company is %(12 + 0.2 * X).* Corporate tax rate is 30%.* The firm's β-free coefficient is 1.2.* The risk-free interest rate is %(10 + 0.1 * Y) and the market return is %(18 + 0.1 * Z).Consider a 10-year projection period for reduced cash flow analysisshall be. 1 of the company. net income (1,200,000 + 50,000 * X) $ as of year-endand that's 10 per cent of revenue. it is expected to increase by $ 45,000 + 1,000 * Y each year until the end of the year.The continuous growth rate of cash flows after the projection period is 4 %calculate the value of the firm by assuming. x =0 y=2 z=01. All projects with positive NPVs should be accepted and those with negative NPVs should be rejected. Comment2. Economic value of a company's assets corresponds to present value of asset cash flows and present value of terminal value. Comment3. 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.
- If the profit margin is 0.2158, asset turnover is 0.5389 and financial leverage is 1.2047, what is the return on asset? Multiple Choice 0.5389 0.1163 0.1401 0.6492Determining missing items in return on investment computation One item is omitted from each of the following computations of the return on investment: Return on Investment = Profit Margin x Investment Turnover 24 % = 10 % x (a) (b) = 24 % x 0.75 12 % = (c) x 1.5 16 % = 20 % x (d) (e) = 15 % x 2.2Q1 (A). An investment of $100 produces rate of return as followsIn year 1: a gain of 10 percentIn year 2: a loss of 5% percentIn year 3: a loss of 8 percentIn year 4: a gain of 3 percent.Calculate the value of the investment at the end of the fourth year and calculate the mean annual rate of return.Q1 (B). What is more important for a firm–profit maximization or value maximization? What issues or conflict of interest can come up between owners and managers and how can they be solved? Q2 (A). On January 12, 2008 Best buy purchases a lot for $48000. The business made a partial payment of $10000 once every thirty days, beginning February 11. On June 11 it plan to make the last payment plus the interest. If the rate of interest is 8%, what is the amount due?Q2 (B). An instrument having a face value of $1000 is discounted at 6% for three years and two months. Find the proceeds and compound discount.Q2 (C). You have an outstanding loan currently. The bank requires you to pay in three…
- Deuk Seon have the following investment centers. Several items are missing from the following table of rate of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter. Department Invested Assets Income from Operations Rate of Return on Investment Min. Rate of Return Min. Amt. of Income from Operations Residual Income Taek (a) (b) (c) 16% P128,000 P10,000 Jung Hwan P850,000 P153,000 (d) 12% (e) (f) Sun woo P825,000 (g) 20% (h) (i) P24,000 Dong Ryong (j) P129,000 24% (k) P60,000 (l) (a) Determine the missing items, identifying each by number. (b) Which division is most profitable in terms of income from operations? (c) Which division is most profitable in terms of rate of return on investment?Give typing answer with explanation and conclusion 27. EFN Define the following: S = Previous year’s sales A = Total assets E = Total equity g = Projected growth in sales PM = Profit margin b = Retention (plowback) ratio Assuming that all debt is constant, show that EFN can be written as EFN = −PM(S)b + [A − PM(S)b] × g Hint: Asset needs will equal A × g. The addition to retained earnings will equal PM(S)b × (1 + g).Determining Missing Items in Return Computation One item is omitted from each of the following computations of the return on investment: Rate of Return on Investment = Profit Margin x Investment Turnover 19 % = 10 % x (a) (b) = 28 % x 0.75 15 % = (c) x 1.5 16 % = 20 % x (d) (e) = 15 % x 1.8 Determine the missing items identified by the letters as shown above. If required, round your answers to two decimal places. (a) (b) % (c) % (d) (e) %