Increase in required ratio

Related BrainMass Solutions

• Capital Intensity Ratio

  The capital intensity ratio is the reciprocal of the total assets turnover ratio." In the above case if the capital intensity ratio is reducing on increase in sales, which implies that the less capital is required with increase in Sales.

• Fed and Money Supply

  required reserve ratio in order to increase money supply

• The required reserve ratio

  The required reserve ratio is 10%. If the Fed injects $100,000,000 of reserves into the banking system, by how much will the money supply increase? The required reserve ratio is 10%.

• question of monetary multiplier

  This is a question of monetary multiplier: multiplier = 1/required reserve ratio = 1/(1/10) = 10 Then increase in Money supply = excess reserves * multiplier = 100*10 = 1000 When required reserve ratio = 1/6, multiplier = 1/required reserve ratio

• Monetary Policy Strategies

  Open-market purchase, higher discount rate, higher required reserve ratio B. Open-market purchase, lower discount rate, lower required reserve ratio C. Open-market sale, lower discount rate, lower required reserve ratio D.

• external financing

  0.500 It means that in 2003 the required external financing will be $68mn and debt equity ratio will be .425.

• Risk aversion, reward-to-risk ratio and debt financing

  Greater confidence in the long-run health of the economy leads to a reduced risk aversion, A) firms' betas will increase B) firms' betas will decrease C) investors' required return will decrease D) investors' required return will increase E) both

• A firm with 30% total debt ratio, total assets of $10 million, and an ROE of 11% has been paying out 60% of earnings to shareholders in the form of dividends. Sales are expected to increase by 15% this year, a faster growth rate than usual. Will external funding be required under these conditions? If so how much? Will the debt-equity ratio remain constant? Show your calculations

  sales =15% Increase in assets required = 10 million * 15%=1.5 million External funding required = 1.5 million - 0.308 million = 1.192 million No debt equity ratio will change.

• Analyzing the Effects of Current Ratio

  Inventory i.e. current assets and Short term payables i.e. current liabilities will increase by 50000 therefore current ratio=(90000+50000)/(180000+50000)=0.609 (increase) 3.