Question
In: Finance
If the return on assets is 0.10 and the average assets are 100. The net income...
If the return on assets is 0.10 and the average assets are 100. The net income is
10
110
90
None of the above
If an analyst notes that inventory increased by 10% from 2014 to 2015 the analyst is using
Vertical analysis
Horizontal analysis
RMA
None of the above
Eps is $4.50 and average number of common shares outstanding is 100,000 the net income minus preferred dividends is
$90,000
$45,000
$450,000
None of the above
Which of the following rations measure liquidity?
Current
Payout
Gross margin
Asset turnover
None of the above
Solutions
Expert Solution
Return on asset = Net income/ average asset
.10 = Net income/ 100
Net income = 10 (A)
--------------------------------------------------------------------------------------------------------------------------
The correct answer is horizontal analysis
--------------------------------------------------------------------------------------------------------------------------
Earnings per share = Net income/ number of o/s common shares
4.5 = Net income/ 100000
Net income = 450000
So we have net income, but value of preferred dividend is not given in the question, and it’s can’t be determined with the given data in the question.
--------------------------------------------------------------------------------------------------------------------------
The current ratio measure liquidity, by dividing current asset by current liability
--------------------------------------------------------------------------------------------------------------------------
Hope that helps.
Feel free to comment if you need further assistance J
jeff jeffy answered 2 years agoRelated Solutions
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8% Preferred stocks, $100 par value
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...
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Operating income
$0
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Required:
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$
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