Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Chapter 7, Problem 3Q
Summary Introduction
To determine: The explanation for the change.
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Over the past year, M.D. Ryngaert & Co. has realized an increase in its current ration and a drop in its total assets turnover ratio. However, the company’s sales, quick ration, and fixed assets turnover ratio have remained constant. What explains these changes?
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Over the past year, M.D. Ryngaert & Co. had an increase in its current ratio and a declinein its total assets turnover ratio. However, the company’s sales, cash and equivalents, DSO,and fixed assets turnover ratio remained constant. What balance sheet accounts must havechanged to produce the indicated changes?
Chapter 7 Solutions
Intermediate Financial Management (MindTap Course List)
Ch. 7 - Define each of the following terms:
Liquidity...Ch. 7 - Financial ratio analysis is conducted by managers,...Ch. 7 - Prob. 3QCh. 7 - Profit margins and turnover ratios vary from one...Ch. 7 - How might (a) seasonal factors and (b) different...Ch. 7 - Why is it sometimes misleading to compare a...Ch. 7 - Greene Sisters has a DSO of 20 days. The companys...Ch. 7 - Vigo Vacations has $200 million in total assets,...Ch. 7 - Winston Watch’s stock price is $75 per share....Ch. 7 - Reno Revolvere has an EPS of $1.50, a cash flow...
Ch. 7 - Needham Pharmaceuticals has a profit margin of 3%...Ch. 7 - Prob. 6PCh. 7 - Ace Industries has current assets equal to 3...Ch. 7 - The Morrit Corporation has $600,000 of debt...Ch. 7 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 7 - Data for Lozano Chip Company and its industry...Ch. 7 - Prob. 14PCh. 7 - Why are ratios useful? What three groups use ratio...Ch. 7 - Prob. 2MCCh. 7 - Calculate the 2019 inventory turnover, days sales...Ch. 7 - Calculate the 2019 debt ratio,...Ch. 7 - Prob. 5MCCh. 7 - Prob. 8MCCh. 7 - Prob. 9MCCh. 7 - What are some qualitative factors that analysts...
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- Which of the following generally indicates an improvement in a company’s financial position? The times interest earned ratio declines The days sales outstanding ratio increases The quick Ratio increases The current ratio declines The total assets turnover ratio decreasesarrow_forwardYou observe that a firm's ROE has increased from the previous year, but both its profit margin and equity multiplier are below the previous year's levels. Which of the following statements is CORRECT? Its return on assets must be lower than the previous year. Its total assets turnover must be lower than the previous year. Its TIE ratio must be higher than the previous year. Its total assets turnover must be higher than the previous year.arrow_forwardNutty sales last year were 15, 000 , and its year-end total assets were P355,000. The average firm in the Industry has a total assets turnover ratio of 2.4. The new CFO believes the company has excess assets that can be sold so as to bring the total assets turnover ratio down to the industry average without affecting sales. By how much must the assets be reduced to bring the total assets tumover ratio to the industry average, holding sales constant?arrow_forward
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