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Financial Ratios

Current ratio, leverage, risk ratios, firm's performance measures

Q12: Airlux Antarctica has current assets of $300 million, current liabilities of $200 million, and a crash-sorry-cash ration of .05. How much cash and marketable securities does it hold? Q18: Current Ratio. How would the following actions affect a firm's current ratio? a. Inventory is sold. b. The firm takes out a bank loa

Break-Even Analysis and Planning

Pringly Division A meeting of senior managers at the Pringly Division has been called to discuss the pricing strategy for a new product. Part of the discussion will focus on estimating sales for the new product. Over the past years, a number of new products have failed to meet their sales targets. It appears that the company'

Information relates to the break-even point at Pezzo Corporation

The following information relates to the break-even point at Pezzo Corporation: Sales dollars ...................... $120,000 Total fixed expenses .......... $30,000 If Pezzo wants to generate net operating income of $12,000, what will its sales dollars have to be? A) $132,000 B) $136,000 C) $168,000 D) $176,000

break even, what if, high-low

High Low, Profit Equation [Lo 2] Rhetorix, Inc. produces stereo speakers. Each unit (a pair of speakers) sells for $900. Below is information on production/sales and costs for 2010. Production and sales in unit Production costs Selling and Admin Costs January 105

Break-Even, Operating Leverage, and Contribution Margin for Stratford Company

Stratford Company distributes a lightweight lawn chair that sells for $15 per unit. Variable expenses are $6 per unit, and fixed expenses total $180,000 annually. Answer the following independent questions: 1. What is the product's CM ratio? 2. Use the CM ratio to determine the break-even point in sales dollars. 3.

Comparing risky assets

Using two risky assets, one offers a higher return than the other, but it also has a higher standard deviation. Will one of these assets always lie on the efficient frontier? Will one of them always be inefficient if held alone?

Debt Ratio

Please help with the following problem regarding debt ratio. Include references in the solution. The debt ratio of Ryznak Industries, a Japanese corporation, is 62%. Why might this be difficult to compare to the debt ratio of a U.S. manufacturing corporation? A) U.S. companies generally have debt ratios greater than 62%

Financial Ratios in same industry: Dangerous?

Need help in discussing and addressing the following concerning financial ratios: Do you think it is dangerous or misleading to compare financial ratios with other firms in the same industry? Why or why not?

Ratio Analysis for McDonald's Corporation

Has the financial performance of McDonald's Corporation improved or declined year-over-year? Provide an analysis of the performance of the firm based on the analysis tools used, and a summary of the company's financial performance and assessment of whether it has improved or declined year-over-year in terms of profitability, ass

BEP, CM Ratio and degree of operating leverage

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable costs are high, totaling $15 per ball, of which 60% is direct labor cost. Last year, the company sold 30,000 of these balls, with

Pringly Division: break even analysis

Pringly Division A meeting of senior managers at the Pringly Division has been called to discuss the pricing strategy for a new product. Part of the discussion will focus on estimating sales for the new product. Over the past years, a number of new products have failed to meet their sales targets. It appears that the company'

Loss Ratio Problem

a.) If the simple loss ratio on a line of property insurance is 73 percent, the loss adjustment expense is 12.5 percent, and the ratio of commissions and other acquisitions expenses is 18 percent, is this line profitable? b.) How does your answer to part (a) change if investment yields of 8 percent are added?

Darlarna Furniture LTD - Financial ratios

Populate the answers in the Financial ratios Word .doc chart for years 2006, 2007, and 2008 based on the financial statements on pages 4 and 5 in the Darlanrna Furniture Ltd (910B02) case study. - Comment on the differences between case study ratios and the industry averages. - Conduct a vertical analysis of income statem

The Glass Ceiling: Women and Minorities

Women and minorities often face what is called a glass ceiling. Why would some individuals hinder or block the advancement of people up the management ladder? Have you ever encountered or observed the glass ceiling?

Balancing a Portfolio of Risky vs. Risky Free Assets

You invest $1000 in a risky asset with an expected rate of return of 0.17 and a standard deviation of 0.40 and a T-bill with a rate of return of 0.04 A) What percentages of your money must be invested in the risky asset and the risk-free asset, respectively, to form a portfolio with an expected return of 0.11? B) What per

Ratio Analysis Overview

See attached Excel file. This first part of this file is an overview of ratio analysis. The second part is specific instructions on how to do Discussion Board 2. Ratio analysis is a way to make the numbers given in financial statements come alive and tell you about the operations and risk of the company you are analyzing or t

Using Ratio Analysis to Complete a Balance Sheet

The following balance sheet information (in $ millions) comes from the Annual Report to Shareholders of Marriott International Inc. for the 2006 fiscal year. Certain amounts have been replaced with question marks to test your understanding of balance sheets. In addition, you are provided with the following informatio

Audit evidence: Evaluate inquiry and oral evidence, limitations of ratio analysis

1. Describe the factors that the auditor should consider in evaluating inquiry and oral evidence provided by client officers and employees? 2. Discuss the validity and limitations of inquiry and oral evidence? 3. Discuss the validity and limitations of ratio analysis in an audit. 4. Discuss the validity and limitations of the

Tablet Development Simulation: Time Warp 2.

It's New Year's Day, 2016. You just had a great New Year's Eve celebration; you finished analyzing the performance of Tablet Development and are ready to charge ahead into the future. As you turn on the TV and try to open your eyes, you notice something strange (again). The TV commentator is saying something about New Year's Day

Break Even Estimated Sales in Units

Tops Company sells Products D and E and has made the following estimates for the coming year: Product Unit Selling Price Unit Variable Cost Sales Mix D $30 $24 60% E 70 56 40 Fixed costs are estimated at $202,400. Determine: (a) the estimated sales in units of the overall product (Sales Mix) necessary to reach

Calculate Quick ratio

Calculate quick ratio for 2005 and 2006. This is the formula used to calculate quick ratio given: Quick ratio = Cash + Marketable securities + Receivables / current liabilities. Has the organization's liquidity improved, deteriorated or stayed the same?

Sprint-Nextel 2010 Ratio Analysis

Need the Liquidity, Solvency and Profitability measures based on the 2010 Sprint-Nextel Financial Statement. Show all formula and data input for each measure. Please refer to the consolidated statement where the data was obtained from. See link below and pages for Financial statement http://quote.morningstar.com/stock-fi

Return on Common Stockholders Equity

If a company had a higher Return on Common Stockholders Equity that is higher than a much larger company, does that make the smaller company a better investment? Even with most of the other ratios being equal, are there other factors that would go in to deciding which company is a better investment when looking at companies in t

Brewster Company: Using ratio analysis, compute ending inventory

Brewster Company has an acid-test ratio of 1.5 and a current ratio of 2.5. Current assets equal $200,000, of which $10,000 is prepaid expenses. The company's current assets consist of cash, marketable securities, accounts receivable, prepaid expenses, and inventory. Brewster Company's inventory must be: A) $30,000 B) $11

Accounting III

1. What is meant by a product's contribution margin ratio? How is this ratio useful in planning business operations? Give an example of a company and specific items that might go into the calculation of the contribution margin. Can break-even sales be calculated by using contribution ratio? 2. What arguments can be advanced i