Assessing a Variety of Business's Financial Ratios
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For the past year, De Vries, Inc. had a cost of goods sold of $59,382. At the end of the year, the accounts payable balance was $13,689. How long on average did it take the company to pay off its suppliers during the year? What might a large value for this ratio imply?
2. Rain Company has a deby equity ratio of 1.25. Return on assets is 7.5%, and total equity is $625,000/ What is the equity multiplier? Return on equity? Net income?
3. If Lee Inc, has a 9% ROA and a 15% payout ratio, what is its internal growth rate?
4. If the School has a 13.1% ROE and a 30% payout ratio, what is its sustainable growth rate?
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The expert examines assessing a variety of business's financial ratios.
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1. For the past year, De Vries, Inc. had a cost of goods sold of $59,382. At the end of the year, the accounts payable balance was $13,689. How long on average did it take the company to pay off its suppliers during the year? What might a large value for this ratio imply?
Answer:
payables turnover = cost of goods sold / payables balance
= $59,382 / $13,689 = ...
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