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Financial Ratios

Construct the current assets section

It is as follows: Construct the current assets section of the balance sheet from the following data. (Use cash as a plug figure after computing the other values.) Yearly sales (credit................$720,000 Inventory turnover..................6 times Current liabilities....................$105,000 Current ratio.......

Practice Questions

Can someone please help me with the following practice questions? 1. Most business enterprises in the United States are A) proprietorships and partnerships. B) partnerships. C) corporations. D) government units. 2. Which of the following would not be classified as a long-term liability? A) Current maturities of long-t

Calculating Break Even of the Workshops

Training Revenue (200 x 20 x $300) $1,200,000 Less Expenses: Trainer costs (200 x 2 x $1500) 600,000 Manager's Salary 120,000 Training officer 90,000 Administrative staff 80,000 Utilities/phone costs 20,000 Manuals for participants 120,000

Expansion and Desired Debt Ratio: Altman Co. Example

The Altman Co. has a debt ratio of 33.33% and it needs to raise $100,000 to expand. Mangement feels that an optimaldebt ratio would be 16.67%. Sales are currently $750,000, and the total assets turnover is 7.5. How should the expansion be financed to achieve the desired debt ratio? a) 100% equity b) 100% debt c) 20% debt

Five procedures followed by The Beat Company

E8-5 Listed below are five procedures followed by The Beat Company. 1. Several individuals operate the cash register using the same register drawer. 2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities. 3. Ellen May writes checks and also records cash payment journal entries.

Funds Flow and Ratio Analysis

I am struggling with this question can you describe the primary difference between "funds flows" analysis and ratio analysis. Which analysis technique is preferred and why?


The comparative balance sheet of a company at October 31, 2009 for the years 2009 and 2008, and the income statements for the years ended October 31, 2008 and 2009, are presented on the following page. Balance Sheet October 31 Assets 2009 2008 Cash $ 34,324 $13,050 Accounts receiva

Debt Ratios and EBITDA Coverage

1. A company has a total asset turnover ratio of 3.5X and net annual sales of $42.00 million, if a company has $3 million of total debt on its balance sheet, what would the debt ratio? 2. Suppose we pay 10% annual interest on our outstanding debt. If we have a total operating cost (including depreciation and amortization) equ

Horizantal & vertical analysis and Ratios

1. Prepare horizontal and vertical analyses. The comparative balance sheets of Philip Morris Companies, Inc. are presented here. PHILIP MORRIS COMPANIES, INC. Comparative Balance Sheets December 31 ($ in millions) Assets 2004 2003 Current assets $25,901 $21,382 Property, plant, and equipment (net) 16,305 1

Dependent variable

Identify the level of dependent variable measurement (nominal, ordinal, interval, or ratio) implied by the statement. 1. You asked congressmen if the money they have received from PACs is more than $100,000, between $50,000 and $100,000, or less than $50,000. 2. You asked congress about the primary source of their PAC

Calculating Financial Ratios from Data

Use the financial data shown below to calculate the following ratios for the current year: (a) Current ratio. (b) Acid-test ratio. (c) Accounts receivable turnover. (d) Days' sales uncollected. (e) Inventory turnover. (f) Days' sales in inventory.

Compare Bailey and Brothers to the industry using ratio analysis

Bailey and Brothers has applied for a loan from the Me Too Bank in order to invest in several potential opportunities. In order to evaluate the firm as a potential debtor, the bank would like to compare Bailey and Brothers to the industry. The following are the financial statements given to Trust Us Bank See Attachment - Must

Calculations for Financial Ratios

4.2 Liquidity ratios: Flying Penguins Corp. has total current assets of $11,845,175, current liabilities of $5,311,020, and a quick ratio of 0.89. What is its level of inventory? 4.6 Leverage ratios: Breckenridge Ski Company has total assets of $422,235,811 and a debt ratio of 29.5 percent. Calculate the company's

Accounting Principles: Ratio Calculations

Scully Corporation's comparative balance sheets are presented in the attached file. Scully's 2008 income statement included net sales of $100,000, cost of goods sold of $60,000, and a net income of $15,000. Instructions: Compute the following ratios for 2008. (a) Current ratio. (b) Acid-test ratio. (c) Receivables turnover

Effect of Transactions on Various Financial Ratios

Effect of transactions on various financial ratios Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it, and provide an explanation for your answer. Use + for increase, - for decrease, and (NE) for no effect. Assume that current assets exceed current liabilities in al

Choosing Financial Targets: Evaluating Capital Structure

Bixton Company's new chief financial officer is evaluating Bixton's capital structure. She is concerned that the firm might be over-leveraged, even though the firm has larger-than-average research and development and foreign tax credits when compared to other firms in its industry. Her staff prepared the industry comparison show

Using Initial Public Offering

Value a privately held company that plans to go public with an Initial Public Offering (IPO). The valuation will provide necessary information to price the IPO. Helen Troy started a Teabucks teashop in Troy, Michigan a few years ago. She formed a corporation, and owned all the shares of this corporation. She played various r

Functional Area Interrelationships paper (Kudler Fine Foods)

Based on the Virtual Organization (please see BELOW), I need help with a 250- to 300 word paper in which I need to complete the following: Identify and explain the steps of the collaboration process among the functional areas that needs to be employed to achieve organizational goals, and prepare an action plan to implement th

Conducting a Break-Even Analysis

Conduct Break-Even Analysis in the following two scenarios: 1. R Squared is a mobile diagnostic imaging company that performs MRI scans of patients at hospitals and clinics that cannot afford their own scanners. General Hospital has contacted R Squared regarding a contract for services. Accountants at R Squared have calcula

Return on investment (ROI) and residual income

See attachment. Return on investment (ROI) and Residual Income Kirsi products is a decentralized wholesaler with four autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to divisional managers who have the highest ROI. Operating results for the company's East division for la

Ratio analysis & vertical analysis

3) Exercise E15-11 Scully Corporation's comparative balance sheets are presented below. SCULLY CORPORATION Balance Sheets December 31 2008 2007 Cash $ 4,300 $ 3,700 Accounts receivable 21,200 23,400 Inventory 10,000 7,000 Land 20,000 26,000 Building 70,000 70

Sharpe ratio calculations....

A measure of risk adjusted performance that is often used in practice is the Sharpe ratio. The Sharpe ratio is calculated as the risk premium of an asset divided by its standard deviation. a.The standard deviations and returns for the funds over the past 10 years are listed below. Assuming a risk free rate of 4%, calculate t

Case 16: Reed's Clothier, Inc.: Working Capital Policy

Questions  Calculate a few ratios and compare Reed's results with industry averages. (Some industry averages are shown in Exhibit 16.4.) What do these ratios indicate? Exhibit 16.4.  Reed's Clothiers Selected Ratios* Liquidity Ratios Industry Current ratio 2.7 Quick ratio 1.6 Receivables turnover 7.7 Av