Explain the reasons that the absolute amounts having limited use while comparing companies.

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Chapter 9, Problem 6Q

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Explain the reasons that the absolute amounts having limited use while comparing companies.

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Sargassum Caribbean Incorporated Balance Sheet as at December 31, 2020 Assets Liabilities Current Assets: Current Liabilities: Cash Accounts Payable 600,000 300,000 200,000 400,000 Notes Payable 900,000 1,500,000 Total Current Liabilities Accounts Receivable Inventory Total Current Assets 900,000 Fixed Assets: Long-Term Liabilities: Property, Plant & Equipment Less: Accumulated Depreciation 1,200,000 Long-Term Debt 1,000,000 Total Long Term Liabilities 200,000 300,000 300,000 Net Fixed Assets Owners' Equity: Common Stock ($1 Par) Capital Surplus Retained Earnings Total Owners' Equity 100,000 300,000 100,000 500,000 1,700,000 Total Liabilities & Owners' Equity Total Assets 1,700,000 Sargassum Caribbean Incorporated Income Statement for Year Ending December 31, 2020 Sales Less: Cost of Goods Sold Less: Administrative Expenses Less Depreciation Earnings Before Interest and 2,500,000 800,000 100,000 104,000 1,496,000 Тахes Less: Interest Expense Taxable Income 20.000 1,476,000 663,000…

6. What will be the impact on a company's profit if sales mix shifts between low margin and high margin products? Explain different possible scenarios.

What can you say about the market value of the company? is it positve or is negative?

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Chapter 9, Problem 6Q

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Explain the reasons that the absolute amounts having limited use while comparing companies.

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Chapter 9, Problem 6Q

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Explain the reasons that the absolute amounts having limited use while comparing companies.

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Chapter 9, Problem 6Q

To determine

Explain the reasons that the absolute amounts having limited use while comparing companies.

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Chapter 9, Problem 6Q

To determine

Explain the reasons that the absolute amounts having limited use while comparing companies.

Answer 6

Chapter 9, Problem 6Q

To determine

Explain the reasons that the absolute amounts having limited use while comparing companies.

Answer 7

Chapter 9, Problem 6Q

To determine

Explain the reasons that the absolute amounts having limited use while comparing companies.

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Ch. 9 - 1. Why are ratios and trends used in financial...Ch. 9 - Prob. 2Q Ch. 9 - Prob. 3Q Ch. 9 - 4. What is the significance of inventory turnover,...Ch. 9 - 5. What is the difference between the current...Ch. 9 - Prob. 6Q Ch. 9 - Prob. 7Q Ch. 9 - Prob. 8Q Ch. 9 - 9. What are some limitations of the earnings per...Ch. 9 - Prob. 10Q

Explain the reasons that the absolute amounts having limited use while comparing companies.

Solution Summary: The author explains that the absolute amounts of a particular financial statement are helpful while comparing the companies.

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Explain the reasons that the absolute amounts having limited use while comparing companies.

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