Inventory and Financial Ratios
Not what you're looking for?
16. Suppose your firm receives a $5million order on the last day of the year. You fill the order with $2 million worth of inventory. The customer picks up the entire order the same day and pays $1 million upfront in cash; you also issue a bill for the customer to pay the remaining balance of $4 million within 30 days. Suppose your firm's tax rate is 0% (i.e., ignore taxes).
Revenues
increase by $3 million
increase by $4 million
increase by $5 million
increase by $1 million
decrease by $2 million
Earnings
increase by $3 million
increase by $4 million
increase by $5 million
increase by $1 million
decrease by $2 million
Receivables
increase by $3 million
increase by $4 million
increase by $5 million
increase by $1 million
decrease by $2 million
Inventory
increase by $3 million
increase by $4 million
increase by $5 million
increase by $1 million
decrease by $2 million
Cash
increase by $3 million
increase by $4 million
increase by $5 million
increase by $1 million
decrease by $2 million
12. In July 2005, American Airlines (AMR) had a market capitalization of 2.3 billion, debt of $14.3 billion and cash of $3.1 billion. American Airlines had revenues of $18.9 billion. British Airways, (BAB) had a market capitalization of $5.2 billion, debt of $8.0 billion, cash of $2.9 billion and revenues of $13.6 billion.
Market capitalization-to-revenue ratio for American Airlines
0.71
0.38
0.76
0.12
Market capitalization-to-revenue ratio for British Airways
0.71
0.38
0.76
0.12
Enterprise value-to-revenue ratio for American Airlines
0.71
0.38
0.76
0.12
Enterprise value-to-revenue ratio for British Airways
0.71
0.38
0.76
0.12
Market capitalization-to-revenue ratio for American Airlines
0.71
0.38
0.76
0.12
Purchase this Solution
Solution Summary
This solution explains how to measure revenues, earnings, receivables, inventory, and cash changes based on a transaction. This solution also explains how to calculate market cap-to-revenue and enterprise value-to-revenue
Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce