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) Statement of the Assignment:
Please prepare a comprehensive list of financial ratios . Write a brief explanation below each financial ratio, e.g. what does the financial ratio measures or what the significance of it is.
For example:
Current Ratio = Current Assist / Current Liabilities
Current ratio measures whether our current assets, if liquidated, are sufficient to pay all of our current liabilities. A CR of 1.5, for example, shows that if we were to liquidate all of our current assets, we will be able to cover 1.5x our current liabilities, whereas a CR of 0.5 shows that liquidating our current assets only covers half of our current liabilities.
THE FOLLOWING RATIONS ARE THE RATIONS I NEED. CAN I PLEASE GET AN ANSWER EACH ONE OF THEM. (EACH BULLET POINT) please explain each ration, its process and how each one of them it is used
Total debt Ratio=Total assets – total equity / total assets
Debit equity ratio = total debt / total equity
Equity multiplier = total assets / total equity
Long term debt ratio = long term debt / long term + total equity
Times interest earned ratio = EBIT / Interest
Cash coverage ratio= EBIT + Depreciation / interest
Asset management, Or turnover, measures
Inventory turnover = Cost of goods sold / inventory
Receivables Turnover = sales / accounts receivable
NWC turnover= sales / NWC
Fixed asset turnover = sales/ net fixed assets
Total asset turnover = sales/ total assets
Profitability measures
Profit margin = Net income/ sales
Return on Assets= Net income / total assets
Return on equity = net income / total equity
Market Value Measures
EPS = net income/ Shares outstanding
PE= price per share / earning per share
Market to book ratio= market value per share / book value per share
Enterprise value= total market value of the stock + book value of liabilities – cash
EBITA Ration= enterprise value/ EBITDA
2)
Select one of the financial ratios LISTED. Write the formula for calculating it, and then explain how it is useful in analyzing the financial health of the firm.
How would you use the ratio, how would you assess whether it is at an appropriate level or if it should be improved, and if so, how would you improve it?
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The rates of return on Cherry Jalopies, Inc., stock over the last five years were 16 percent, 11 percent, −1 percent, 6 percent, and 11 percent. What is the geometric return for Cherry Jalopies, Inc.? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 35% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 20.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = CVy = Which stock is riskier for a diversified investor? For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is more risky. Stock Y has the higher beta so it is more risky than Stock X. For diversified investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the higher standard deviation of expected returns is more risky. Stock X has the higher standard deviation so it is more risky than Stock Y. For diversified investors the relevant risk is measured by beta. Therefore, the stock
with the lower beta is more risky. Stock X has the lower beta so it is more risky than Stock Y. For diversified investors the relevant risk is measured by standard deviation of expected returns. Therefore, the stock with the lower standard deviation of expected returns is more risky. Stock Y has the lower standard deviation so it is more risky than Stock X. For diversified investors the relevant risk is measured by beta. Therefore, the stock with the higher beta is less risky. Stock Y has the higher beta so it is less risky than Stock X. Calculate each stock's required rate of return. Round your answers to two decimal places. rx = % ry = % On the basis of the two stocks' expected and required returns, which stock would be more attractive to a diversified investor? Calculate the required return of a portfolio that has $7,000 invested in Stock X and $8,500 invested in Stock Y. Do not round intermediate calculations. Round your answer to two decimal places. rp = % If the market risk premium increased to 6%, which of the two stocks would have the larger increase in its required return?
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What are the country specific factors that should be considered when estimating the cash flow of a foreign target? Why?
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Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost: You just received an offer in the mail to transfer your $12,000 balance from your current credit card, which charges an annual rate of 19.8 percent, to a new credit card charging a rate of 10.4 percent. How much faster could you pay the loan off by making your planned monthly payments of $225 with the new card? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) What if there was a 2 percent fee charged on any balances transferred? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
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The Shop Right Shopping Complex purchased a delivery van for $33,850. The van has a useful life of five years and an estimated salvage value at $1,250. Prepare a depreciation schedule for the van using the (a) double-declining balance method (b) sum-of-the-year's digit method.
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The December 31, 2018, balance sheet of Whelan, Inc., showed long-term debt of $1,455,000, $151,000 in the common stock account, and $2,760,000 in the additional paid-in surplus account. The December 31, 2019, balance sheet showed long-term debt of $1,690,000, $161,000 in the common stock account and $3,060,000 in the additional paid-in surplus account. The 2019 income statement showed an interest expense of $99,500 and the company paid out $156,000 in cash dividends during 2019. The firm’s net capital spending for 2019 was $1,070,000, and the firm reduced its net working capital investment by $136,000.
What was the firm's 2019 operating cash flow, or OCF? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
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Yield to maturity The Salem Company bond currently sells for
$1,120.30,has a coupon interest rate of 16%and a $1000 par value,pays interest annually,and has 17
years to maturity.
a. Calculate the yield to maturity (YTM)on this bond.
b. Explain the relationship that exists between the coupon interest rate and yield to maturity and the par value and market value of a bond.
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Diamond Corporation has an existing loan in the amount of $ 5 million with an annual interest rate of 5.4 %. The company provides an internal company-prepared financial statement to the bank under the loan agreement. Two competing banks have offered to replace Diamond Corporation's existing loan agreement with a new one. First Capital Bank has offered to loan Diamond $ 5 million at a rate of 4.1 % but requires Diamond to provide financial statements that have been reviewed by a CPA firm. Money Tree Bank has offered to loan Diamond $ 5 million at a rate of 3.1 % but requires Diamond to provide financial statements that have been audited by a CPA firm. Diamond Corporation's controller approached a CPA firm and was given an estimated cost of $ 27 comma 000 to perform a review and $ 62 comma 000 to perform an audit.
A. Explain why the interest rate for the loan that requires a review report is lower than that for the loan that did not require a review. Explain why the interest rate for the loan that requires an audit report is lower than the interest rate for the other two loans.
The interest rate for the loan that requires a review report is___ the loan that did not require a review because of the ___information risk. A review report provides ___assurance to financial statement users. Compared to a review report, an audit provides ___assurance and thus___information risk. As a result, the interest rate is ___ or the loan with the audit report.
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| You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testified that it will be five years before the plaintiff is able to return to work. The jury has already decided in favor of the plaintiff. You are the foreperson of the jury and propose that the jury give the plaintiff an award to cover the following: (a) The present value of two years’ back pay. The plaintiff’s annual salary for the last two years would have been $43,000 and $46,000, respectively. (b) The present value of five years’ future salary. You assume the salary will be $51,000 per year. (c) $150,000 for pain and suffering. (d) $20,000 for court costs. |
| Assume that the salary payments are equal amounts paid at the end of each month. If the interest rate you choose is an EAR of 6.5 percent, what is the size of the settlement? |
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|
Prescott Football Manufacturing had the following operating results for 2019: sales = $30,574; cost of goods sold = $21,884; depreciation expense = $3,568; interest expense = $584; dividends paid = $881. At the beginning of the year, net fixed assets were $20,278, current assets were $2,325, and current liabilities were $4,664. At the end of the year, net fixed assets were $23,197, current assets were $4,535, and current liabilities were $3,205. The tax rate for 2019 was 24 percent. |
| a. | What is net income for 2019? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| b. | What is the operating cash flow for 2019? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| c. | What is the cash flow from assets for 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| d. | Assume no new debt was issued during the year. What is the cash flow to creditors for 2019? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
| e. | Assume no new debt was issued during the year. What is the cash flow to stockholders for 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
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Explain, in your own words, the concept of the time value of money in a relationship to both the simple direct investment and timing for maximizing the value of a corporations excess cash as well as for cash flows of projects and capital/project investment analysis. Be sure to discuss the limitation of time value analysis in terms of the component financial data points used in the underlying formulas and financial analysis results.
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Locate a peer-reviewed article on waste in the healthcare system (for example, overuse of the emergency room, fraud, poorly managed inventory, or the overuse of the ICU). In your post, summarize the key issues, making sure to cite your sources.
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Asset valuation and risk Personal Finance Problem Laura Drake wishes to estimate the value of an asset expected to provide cash inflows of $4,500for each of the next 4 years and $20,724
in 5 years. Her research indicates that she must earn 3% on low-risk assets, 7% on average-risk assets, and 13% on high-risk assets.
a. Determine what is the most Laura should pay for the asset if it is classified as (1) low-risk, (2) average-risk, and (3) high-risk.
b. Suppose Laura is unable to assess the risk of the asset and wants to be certain she's making a good deal. On the basis of your findings in part
a,
what is the most she should pay? Why?
c.All else being the same, what effect does increasing risk have on the value of an asset? Explain in light of your findings in part
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