FUND. OF CORPORATE FIN. 18MNTH ACCESS
15th Edition
ISBN: 9781259811913
Author: Ross
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 3, Problem 1QP
Calculating Liquidity Ratios [LO2] SDJ, Inc., has net working capital of $1,920, current liabilities of $4,380, and inventory of $3,750. What is the current ratio? What is the quick ratio?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Calculating Profi tability Ratios [LO2] Wakers, Inc., has sales of $29 million,total assets of $17.5 million, and total debt of $6.3 million. If the profi t marginis 8 percent, what is net income? What is ROA? What is ROE?
FINA's business risk (Ru) is 9% in the industry. The debt-to-equity ratio is 0.4. The cost of debt is 3%. The tax rate is 20%. What is the required return of equity (Re)?
Company A's simple EPS is $1 and diluted EPS is $.50. Company B's simple EPS is $1.5 but his diluted EPS is $.25. What would this tell you about the company?
Next, suppose Company A's debt to equity ratio is 2 and Company's B's debt to equity ratio is .5. What would this tell you about the company?
Besides profitability, what would the measures about tell you about how the company raises money?
Chapter 3 Solutions
FUND. OF CORPORATE FIN. 18MNTH ACCESS
Ch. 3.1 - Prob. 3.1ACQCh. 3.1 - Prob. 3.1BCQCh. 3.2 - Prob. 3.2ACQCh. 3.2 - Name two types of standardized statements and...Ch. 3.3 - What are the five groups of ratios? Give two or...Ch. 3.3 - Given the total debt ratio, what other two ratios...Ch. 3.3 - Turnover ratios all have one of two figures as the...Ch. 3.3 - Profitability ratios all have the same figure in...Ch. 3.4 - Return on assets, or ROA, can be expressed as the...Ch. 3.4 - Return on equity, or ROE, can be expressed as the...
Ch. 3.5 - Prob. 3.5ACQCh. 3.5 - Prob. 3.5BCQCh. 3.5 - Prob. 3.5CCQCh. 3.5 - Prob. 3.5DCQCh. 3 - Prob. 3.1CTFCh. 3 - Prob. 3.2CTFCh. 3 - What is the correct formula for computing the...Ch. 3 - Prob. 3.5CTFCh. 3 - Current Ratio [LO2] What effect would the...Ch. 3 - Current Ratio and Quick Ratio [LO2] In recent...Ch. 3 - Prob. 3CRCTCh. 3 - Prob. 4CRCTCh. 3 - Prob. 5CRCTCh. 3 - Prob. 6CRCTCh. 3 - Prob. 7CRCTCh. 3 - Prob. 8CRCTCh. 3 - Prob. 9CRCTCh. 3 - Industry-Specific Ratios [LO2] There are many ways...Ch. 3 - Prob. 11CRCTCh. 3 - Prob. 12CRCTCh. 3 - Calculating Liquidity Ratios [LO2] SDJ, Inc., has...Ch. 3 - Calculating Profitability Ratios [LO2] Shelton,...Ch. 3 - Calculating the Average Collection Period [LO2]...Ch. 3 - Calculating Inventory Turnover [LO2] The Green...Ch. 3 - Calculating Leverage Ratios [LO2] Levine, Inc.,...Ch. 3 - Calculating Market Value Ratios [LO2] Makers Corp....Ch. 3 - DuPont Identity [LO4] If Roten Rooters, Inc., has...Ch. 3 - DuPont Identity [LO4] Zombie Corp. has a profit...Ch. 3 - Prob. 9QPCh. 3 - Prob. 10QPCh. 3 - Prob. 11QPCh. 3 - Equity Multiplier and Return on Equity [LO3] SME...Ch. 3 - Just Dew It Corporation reports the following...Ch. 3 - Prob. 14QPCh. 3 - Prob. 15QPCh. 3 - Prob. 16QPCh. 3 - Calculating Financial Ratios [LO2] Based on the...Ch. 3 - Using the DuPont Identity [LO3] Y3K, Inc., has...Ch. 3 - Days Sales in Receivables [LO2] A company has net...Ch. 3 - Ratios and Fixed Assets [LO2] The Caughlin Company...Ch. 3 - Profit Margin [LO4] In response to complaints...Ch. 3 - Return on Equity [LO2] Firm A and Firm B have...Ch. 3 - Calculating the Cash Coverage Ratio [LO2] Ugh...Ch. 3 - Cost of Goods Sold [LO2] W B Corp. has current...Ch. 3 - Prob. 25QPCh. 3 - Some recent financial statements for Smolira Golf...Ch. 3 - DuPont Identity [LO3] Construct the DuPont...Ch. 3 - Prob. 28QPCh. 3 - Market Value Ratios [LO2] Smolira Golf Corp. has...Ch. 3 - Tobins Q [LO2] What is Tobins Q for Smolira Golf?...Ch. 3 - Using the financial statements provided for SS...Ch. 3 - Mark and Todd agree that a ratio analysis can...Ch. 3 - Compare the performance of SS Air to the industry....
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- H5. Use the following information to find the external financing needed (EFN): Current sales: $6,000; Current costs: $3,000; Total Assets: $20,000; Total Debt: $8,000; Total equity: $12,000; Projected sales: $9,600. Total assets and costs are proportional to sales. The firm does not plan to distribute any dividends. The level of debt and equity is independent of the level of sales. Options: A) $3,200 B) $1,450 C) $8,800 D) $7,200 E) $12,000arrow_forwardCalculating Market Value Ratios [LO2] Bach Corp. had additions to retainedearnings for the year just ended of $430,000. The fi rm paid out $175,000 in cashdividends, and it has ending total equity of $5.3 million. If the company currentlyhas 210,000 shares of common stock outstanding, what are earnings per share?Dividends per share? Book value per share? If the stock currently sells for $63 pershare, what is the market-to-book ratio? The price–earnings ratio? If the companyhad sales of $4.5 million, what is the price–sales ratio?arrow_forwardFIN320 (DuPont analysis) Garwryk, Inc., which is financed with debt and equity, presently has a debt ratio of percent. What is the firm's equity multiplier? How is the equity multiplier related to the firm's use of debt financing (i.e., if the firm increased its use of debt financing would this increase or decrease its equity multiplier)? Explain. What is the firm's equity multiplier? The equity multiplier is given by: equity multiplier = 1/1-DEBT RATIO The equity multiplier is___. (Round to two decimal places.) How is the equity multiplier related to the firm's use of debt financing (i.e., if the firm increased its use of debt financing would this increase or decrease its equity multiplier)? Explain. (Select the best choice below.) A. If the company decreases its debt financing it will increase its debt ratio, therefore it will increase its equity multiplier. B. If the company increases its debt financing it will increase its debt ratio, therefore it will…arrow_forward
- 29.Which of the following statements about liquidity and solvency ratios is/are true?Statement I. The current ratio expresses the capability of a firm's current assets to cover its current liabilities without resorting to selling its long-term assets to cover its current obligations.Statement II. A higher debt to equity ratio means that the financing aspect of the business comes more from its debtors than from its equity holders.Statement III. In computing for the quick ratio, highly liquid assets such as marketable securities should be excluded from the numerator.Statement IV. Solvency refers to how quick, efficient, and cheap it is to convert a security into cash. a. I only b. I and II c. I and III d. I and IVarrow_forward3 Use the information below to calculate WACC given the Market Capitalization of the company: 3) Market Cap = 193.2 Million EBIT = 17.2 Million Depreciation = 4.2 Million Capital Expenditures = - 3.8 Million Change in W/C = 2.1 Million growth = 7% FCF = ? WACC = ?arrow_forwardQ18 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%arrow_forward
- In the Chart1. What percentage of 2000's disposable income is invested? 2. How much should be invested if you have $4,000 in cash? If a corporation holds $40 billion in bonds, $10 billion in preferred stock, and $20 billion in common stock... A. How much capital is it worth? B. How much would it theoretically take to manage it? C. Practically, how much would it take to control it?arrow_forwardH3. A firm wishes to maintain an sustainable growth rate of 9 percent and a dividend payout ratio of 64 percent. The ratio of total assets to sales is constant at 0.9, and the profit margin is 10.1 percent. If the firm also wishes to maintain a constant debt-equity ratio, what must it be? Please show proper step by step calculationarrow_forward3. ABC Corp.’s equity multiplier is 1.25. What is its debt ratio? 4.Easy Corp.’s return on assets measure is 0.20 (20%. Its return on equity measure is 0.25 (25%). What is the firm’s equity multiplier?arrow_forward
- Liquity Rate A firm used 1 million in cash to puchase inventory. Will its current ratio rise or fall? Will its quick ratio rise or fall? Please cplain both.arrow_forward3 Suppose that the principal of a synthetic CDO is $125 million. The equity, mezzanine, and senior principals are $10 million, $25 million, and $90 million respectively. Which tranche(s) is responsible for payouts of $7 million due to defaults by companies in the portfolio? Which tranche(s) is responsible if those payments rise to $14 million?arrow_forward(b) Bartley Barstools has an equity multiplier of 3.8, and its assets are financed with some combination of long-term debt and common equity. What is its debt to asset ratio?(c) Doublewide Dealers has a ROA of 12%, a 3% profit margin, and an ROE of 15.5%. What is its total assets turnover? What is its equity multiplier?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781305635937Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781285065137Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781285065137
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License