Suppose you were comparing a discount merchandiser with a high-end merchandiser.Suppose further that both companies had identical ROEs. If you applied the DuPontequation to both firms, would you expect the three components to be the same for eachcompany? If not, explain what balance sheet and income statement items might lead to thecomponent differences.

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A: As Per ASPE Revenue Recognition,  Revenue is the gross inflow of cash receivable or other…

Q: Market Ratios Provide brief definition of what Market ratios mean to the profitability of a…

A: 1.Market ratios- These are used to evaluate whether the shares of a public company are underpriced…

Q: Many financial analysts substitute one amount for another in making ratioanalysis comparisons in…

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

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A: Given, Quantity & price we have to find Total revenue and Marginal revenue   Total revenue =…

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A: The gross profit method is the one wherein the amount of inventory is measured using the gross…

Q: Profit margins and turnover ratios vary from one industry to another. Whatdifferences would you…

A: Profit margin is a measure of company’s earnings relative to its revenue. In simple terms, it is the…

Q: Contrast the income statement effect of LIFO versus FIFO(on Cost of Goods Sold and Gross Profit)…

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: What three factors would influence your evaluation as to whether a company’s current ratio is good…

A: Current ratio: Current ratio is one of the liquidity ratios, which measures the capacity of the…

Q: a. The market value of the comps should be available.   b. The valuation object should be compared…

A: Share valuation is the process of determining the value of the shares based on certain factors.…

Q: Arruza Co. is considering switching from the specific-goods LIFO approach to the dollar-value LIFO…

A: a. b. c. d.

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A: Profitability ratios are the ratios that are calculated to know the different profits as a…

Q: How might a company simplify its use of the NRV method when final selling prices can vary sizably in…

A: Net Realizable Value (NRV) Method: NRV method is a method of joint cost allocation which takes into…

Q: A decision about one product is said to have ________ effects when a change in the sales of one…

A: A decision about one product is said to have ________ effects when a change in the sales of one…

Q: Contrast the modern construct for FISIM with a measure that sub- tracts deposits from the financial…

A: Financial Intermediation Services Indirectly Measured (FISIM) In general, only a small part of…

Q: Comparisons of income can be very difficult for two companies, even though they sell the same…

A: The amount of income reported by a company depends on two main things. First is its revenues. Second…

Q: Which of the following statements about the quality of earnings ratio is true? Multiple Choice…

A: Lets understand the basics. Quality of earning ratio indicates the cashflow from operating activity…

Q: What does it mean when a company has a major expense? Like for example, "The major expense for…

A: For your understanding -  There are two types of cost direct costs and indirect costs. Direct costs…

Q: Identify which standard of comparison, (a) intracompany, (b) competitor, (c) industry, or (d)…

A: There are four standards of comparison: Intracompany Competitors Industry Guidelines

Q: mc grawhill education company vs pearson, competitive ratio analysis. Why is this competitor…

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Q: If a firm sold some inventory on credit, its current ratio would probably not change much, but its…

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Q: Explain the Sales Comparison Approach?

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Q: Which of the following statements is true?

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Q: While being in different industries, two companies have the same expected earnings per share and the…

A: Business risk is the exposure to risk a company faces from the internal and external factors which…

Q: In vertical analysis, the relevant base for cost of goods sold is which of the following?…

A: Cost of sold is a term reported in the income statement. So the relevant base for it should also be…

Q: All other things being equal, a company that sells multiple products should attempt to structure its…

A: we know that,  sales - variable cost = contribution

Q: Which of the following statements about close buyer-seller relationships in business markets is…

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Q: How would your error affect breakeven sales and operating income under the proposed sales commission…

A: Affect of error on break-even sales and operating income:

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A: PB ratio is a commonly used ratio in the industry to identify the stocks for investing. It comes…

Q: In comparing the current ratios of two companies, why is it invalid to assume that the company with…

A: Current ratio: The financial ratio which evaluates the ability of a company to pay off the debt…

Q: Which of the followings is/are drawbacks associated with valuation by comparables with P/S or P/E?…

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Q: Required: Describe what this information indicates about the differences in approach between the two…

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A: Step 1   The PE ratio is calculated by dividing the latest trading price of a company's stock by its…

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Q: Profit margins and turnover ratios vary from one industry to another. What differenceswould you…

A: Turnover ratios assist the firm in determining the efficiency with which it is turning goods into…

Q: It is said that the most important/critical component of the sales comparison approach to value is O…

A: Sales refer to the transaction arises and taken place between two or more individual or companies in…

Q: answer these question in just two sentences. a..“If a firm sold some inventory on credit, its…

A: The financial ratios refer to the ratios that are calculated using the financial data from the…