Question

In: Finance

For each definition, list the “ratio category (or grouping)” that is described by filling in the...

For each definition, list the “ratio category (or grouping)” that is described by filling in the blanks from (a) to (f) and provide one example for each category or grouping. a) Determines a company’s ability to pay off short term obligations or debts as they come due. ________________________ b) Relates company’s internal performance to the external judgment of the marketplace in terms of what it is worth. ¬________________________ c) Identifies percentage of earnings paid out to shareholders and what is reinvested for internal growth. ________________________ d) Speed at which company turns over its inventory, receivables and long-term assets. ________________________ e) How a company is financed between debt [lenders] and equity [owners]. ________________________ f) Measures return on sales, assets and total capital. ________________________

Solutions

Expert Solution

a)Liquidity Ratio. It indicates how much cash, short term assets that are easily converted to cash are available at the company's disposal to pay off short term obligations. Example: Current Ratio

b)Market Prospect Ratios or Valuation Ratios. These Ratios indicates how much the market is ready to pay (External Judgement) for every one dollar the company earns( Internal performance) Ex: P/E ratio

c) This will be answered by splitting the question in to two halves. Dividend Payout Ratio, indicates percentage of earnings paid out to shareholders as dividends. Retention Ratio, indicates percentage of earnings that is reinvested for internal growth. There is NO one word categorization available for this one, although it could be classified under Valuation Ratio

d) Activity Ratios. Measures a firms ability to convert different B/S accounts to Cash and how quickly it can do it.Example: Inventory Turnover Ratio

e) Capital Structure/ Leverage Ratios. Indicates the mix of funds provided by the equity and debt holders. Example: Debt/Equity Ratio

f) Profitability Ratios. These ratios measure a company's performance. It is simply the capacity of the company to make profit after accounting for all types of expenses. Example: Return on Sales, Return on Assets


Related Solutions

List the categories of genes that are typically mutated in cancer. For each category, briefly state...
List the categories of genes that are typically mutated in cancer. For each category, briefly state how the mutation would contribute to carcinogenesis
For each of the procedures described in the table below, select from the list provided the...
For each of the procedures described in the table below, select from the list provided the audit procedure that the auditor performed. Then, indicate if the procedure was a substantive procedure or a test of controls. Possible Audit Procedure: 1. Analytical Procedures 2. Confirmation 3. Inquiry 4. Inspection 5. Observation 6. Recalculation 7. Reperformance Description of Procedure Audit Procedure Performed (1-7 from list above) Classification of Audit Procedure (Substantive or Test of Controls) 1) Requested the bank to respond to...
1. Identify the three categories of the accounting equation, and list at least four accounts associated with each category.
 1. Identify the three categories of the accounting equation, and list at least four accounts associated with each category. 2. What is the purpose of the chart of accounts? Explain the numbering typically associated with the accounts. 3. What does a ledger show? What's the difference between a ledger and the chart of accounts? 4. Accounting uses a double-entry system. Explain what this sentence means.
List the 7 characteristics of living things and provide a definition of each. Fig 1.1 Distinguish...
List the 7 characteristics of living things and provide a definition of each. Fig 1.1 Distinguish among the three domains of life. After being given a description of a living organism be able to appropriately classify which domain it belongs to. List and distinguish among the three kingdoms of multicellular, eukaryotic life. (Plants, Animals, Fungi)
Identify the definition for each term listed below from the following list.     1. The study...
Identify the definition for each term listed below from the following list.     1. The study of how people make decisions where attaining goals depends on interactions with others.     2. A table that shows the payoffs each firm earns from every combination of firm strategies.     3. An agreement among firms to charge the same price or otherwise not to compete.     4. A strategy that is the best for a​ firm, no matter what strategies other firms use....
Match the category of healthcare professional/provider with the correct definition: A. A professional who is fundamental...
Match the category of healthcare professional/provider with the correct definition: A. A professional who is fundamental in the management of mental illnesses, offering diagnostic services, treatment, and social support to those suffering from mental illness. B. An academic professional who studies the interaction between a person's brain function and his or her behaviors, as well as the environment and the person's behaviors C. A medical professional who is sometimes to as an allopathic physician D. A type of physician who...
With regard to grouping quantitative data into classes in which each class represents a range of...
With regard to grouping quantitative data into classes in which each class represents a range of possible​ values, there are two methods for depicting the classes. Identify the two methods and explain the relative advantages and disadvantages of each method. Identify the two methods and explain the relative advantages and disadvantages of each method. A. The methods are limit grouping and cutpoint grouping. Both methods can be used when there are too many distinct values to employ​ single-value grouping. Limit...
Please list each different medical term in the following Case Study then provide a brief definition...
Please list each different medical term in the following Case Study then provide a brief definition of each term. A 44 years old male was brought into the hospital emergency room with complaints of thoracic angina. there was a suspension of the pneumonia so antibiotic were given but the patient continued to complain of persistent and worsening thoracic angina at which that point cardiac work up was ordered that involved having an electrocardiogram. the electrocardiogram diagnosed the patient with an...
There are three categories of management assertions.  Each category includes assertions related to that specific category of...
There are three categories of management assertions.  Each category includes assertions related to that specific category of management assertions.  Explain which assertion you deem to be the most important and thus should be the primary focus to auditors when performing the audit.  Also explain which management assertion you deem to be the least crucial.
There are different categories of ratio analysis: liquidity, activity, profitability and leverage. Which category would be...
There are different categories of ratio analysis: liquidity, activity, profitability and leverage. Which category would be the most important to potential investors?  
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT