Explore BrainMass

Explore BrainMass

    Ratio calculation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I am a little lost here are my problems please show me how to calculate

    1. In March 2005, General Electric (GE) had a book value of equity of $113 billion, 10.6 billion shares outstanding and a market price of $36 per share. GE also had a cash of $13 billion and total debt of $370 billion. Four years later in early 2009, GE had a book value of equity of $105 billion 10.5 billion shares outstanding with a market price of $10.80 per share, cash of $48 billion, and total debt of $524 billion. Over this period what was the change in GEs

    a. market capitalization
    b. market to book ratio
    c. book debt equity ratio
    d. market debt equity ratio
    c. enterprise value

    2. In July 2007 Apple had cash of $7.12 billion current assets of $18.75 billion current liability of $6.99 billion and inventories of $0.25 billion.

    a. What was Apples current ratio
    b. what was apples quick ratio
    c. in July 2007 Dell had a quick ratio of 1.25 and a current ratio of 1.30. What can you say about the asset liquidity of apple relative to dell?

    © BrainMass Inc. brainmass.com October 2, 2020, 12:26 am ad1c9bdddf

    Solution Preview

    a. market capitalization
    Market capitalization = Number of shares X market price per share
    In 2005, market capitalization = 10.6 X 36 = $381.6 billion
    In 2009, market capitalization = 10.5 X 10.80 = $113.4 billion
    Change = 113.4-381.6 = -268.2 billion

    b. market-to-book ratio

    Market to book ratio = Market value/Book value
    In 2005, market to book = 381.6/113 = 3.38
    In 2009, market to book = 113.4/105 = 1.08
    The ratio has ...

    Solution Summary

    The solution explains the calculation of various ratios