What problem might arise when comparing firms’ fixed assetsturnover ratios?

Q: How do you calculate Fixed Asset Turnover? What is the Free Cash Flow Ratio? What is the difference…

A: The answers for the questions on accounting ratios are discussed hereunder : Fixed Assets turn over…

Q: How is the the financial ratio analyses very useful?

A: Ratio analysis is a method of relative measure between two numericals for gaining knowledge about a…

Q: What is the difference between the ratios that use the market price and the other ratios? Why might…

A: Ratio analysis mistreatment money statements includes accounting, securities market, and management…

Q: What type of analysis uses ratio analysis to evaluate equities? A) Technical analysis. B)…

A: Fundamental analysis (FA): It is a technique for estimating a security's intrinsic value by looking…

Q: Briefly describe the ratios that can be used to evaluate a company’s ability to pay current…

A: The ratios used to evaluate the ability of the company to pay the current liabilities are working…

Q: Which ratio would a company most likely use to measure its ability to meet short-termobligations?B .…

A: The current ratio is a liquidity ratio that measures a company's ability to pay short-term…

Q: Explain how current assets’ investment policies affect the firm’s risk and return trade-offs.

A: Current assets for a company are all those assets that are readily available for the conversion into…

Q: Explain the effect of issuance cost on firm value.

A: There are issues cost associated with debt and equity that has impact on  value of firm.

Q: Explain what Return on Assets (ROA) measures? Will two firms with the same EBIT have the same ROA?

A: Return on assets is a measure used by companies to analyse how effectively assets of the business…

Q: How is can CAPM, Sharpe ratio, Treynor measures and Jensen’s Alpha be used to maintain positive…

A: The performance of portfolio or investment should not evaluated only using the return of portfolio…

Q: Advantage and disadvantages of ratios in analyzing financial performance

A: Ratio Analysis is the financial analysis technique which is used to analyse the financial condition…

Q: Explain what is financial ratio analysis?

A: Traders and investors use ratio analysis to assess a company's financial health by evaluating…

Q: What does it mean to adopt a maturity matching approach to financing assets, includingcurrent…

A: Maturity matching states that long period funds must be utilized to finance long period assets and…

Q: How should the capital structure weights used to calculate the WACC be determined?

A: Weighted average cost of capital (WACC): It is a figuring of the cost of capital of an organization,…

Q: What does it mean to adopt a maturity matching approach to financing assets, including current…

A: Matching concept while preparing the income statement , revenue  and profits are matched with…

Q: Which one of these ratios measures the efficiency at which a firm employs its assets?

A: A ratio is a tool used by the management to make an analysis of the financial statements(profit and…

Q: What is market value ratios?

A: Introduction: Market value ratios help to assess the economic position of publicly dealt…

Q: Describe a procedure firms can use to establish costs of capital forprojects with differing degrees…

A: Cost of capital is the rate of interest that the company pays to their investors for investing in…

Q: What is meant by asset transformation and how is it the basis for differentiating between indirect…

A: Finance transformation can be defined as a business-wide combination of process, system, and culture…

Q: What are the advantages of matching the maturities of assets and liabilities? What are the…

A: Matching the maturities of assets and liabilities refers to matching the similar category of assets…

Q: Why is it important to analyze trends in various financial ratios as well as their absolute levels?

A: Accounting ratio:   It is a number expressed in terms of another to establish relationship among…

Q: What does the rate of return on total assets measure, and how is it calculated?

A:

Q: How do economies of scale and lumpy assets affect financialforecasting?

A: Economies of scale are cost advantages reaped by companies when production becomes efficient.…

Q: What assumptions are made in a comparative financial analysis, especially on an international scale?

A: Comparative Analysis: Take two or more sets of data. Compare them side by side And then analyze the…

Q: Why is the operating return on assets ratio also referred to as the operating returnon investment?

A: Introduction: Operating asset return is nothing but a profitability measure and it is a difference…

Q: what is the return asset that is used in financial statement analysis?

A: Here in this case we need to understand the meaning of return on asset ratio of financial statement…

Q: How might the different ages of firms distort comparisons of their fixed assets turnover ratios?

A: Fixed assets turnover ratio is a type of ratio analysis tool that is calculated by dividing the…

Q: What is the usefulness of using Ratio analysis in financial reporting? What is industry average? How…

A: Ratio Analysis: Ratio analysis is a quantitative means of obtaining insight into a business's…

Q: Asset management ratios Market value ratios Debt management ratios Liquidity ratios

A: Lets understand the basics. Management calculate various ratios to calculate the result of the…

Q: Give some examples of the market-value ratios?

A: Market value ratios may include various types of ratios which indicate the value of company’s share.…

Q: Explain how do analysts use ratios to analyse a firm’s leverage?

A: Ratios plays an important role in determining and analysing financial position of the company.…

Q: What is the advantage of using comparative statements for financial analysis rather than statements…

A: Comparative statements: Comparative statements are prepared to analyze the relationship among…

Q: how value drivers (Return on Equity, Net Profit Margin, and Total Asset Turnover) are related to…

A: Financial statements: Financial statements are the summary of transactions presented in the form of…

Q: asset turnover ratio?

A: Asset turnover ratio = Sales/((Total assets at the beginning of the year + Total assets at the end…

Q: What will be Measures of Investment Performance Using Ratios?

A: It is always essential to evaluate the performance of the investments to decide whether the…

Q: What caused the increase in liquidity ratios??

A: Liquidity ratios use metrics such as the quick ratio, current ratio, and operating cash flow ratio…

Q: Distinguish between hard and soft capital rationing

A: Capital rationing is allocating a given amount among the most profitable projects which can maximize…

Q: how was capital asset pricing model (CAPM) created? GIVE reference

A: Meaning CAPM Capital asset pricing model, It is created to explain the investor that he/she will get…

Q: Compare the key Financial Ratios?

A: The question is based on the concept of financial ratios. The ratio is used to analysis financial…

Q: what the meaning of current assets ratio?

A: Assets are the rights and resources being held by the business. Assets that are either in cash or…

Q: What would you choose? OTHER INVESTMENT ASSETS or ALTERNATIVES TO FIXED INCOME AND EQUITIES

A: Portfolio investments: Portfolio investment is the type of investment in which various types of…

Q: What do the Profitability ratios show?

A: Profitability Ratio Profitability Ratio is basically a tool to assess a company's ability to…

Q: Discuss why the present value of cash flows and the relative valuation ratios valuation approaches…

A: Valuation of entity is done in two methods as: Discounting expected inflows from entity in upcoming…

Q: How is the CAPM (Capital Asset Pricing Model) related to valuation?

A: The relationship between systematic risk and expected return on assets, particularly equities, is…

Q: What do the Asset management ratios measure?

A: Asset management (turn over) ratios compare an organization's assets with its turnover. Asset…

Q: What is fixed assets turnover ratio?

A: Ratio analysis: It refers to the quantitative technique of financial analysis that allows gaining an…