and the South Branch’s comparison when it comes to profitability, short-term and long-term liquidity. * Cash flow provided * North Branch 600,000 * South Branch 550,000 * Assumptions * The balances in asset and equity accounts at year-end approximate the average balances during the period. * Income tax rate was 30% Simplified and Condensed Income Statements Tasks Using appropriate financial
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(Due by midnight on Saturday) WACC is the average costs of financing sources either debt or equity. The WACC equation is the cost of each capital component multiplied by its proportional weight and then summing. WACC= E/V*Re+D/V*Rd*(1-Tc) Re=cost of equity, Rd=cost of debt, E=market value of the firm’s equity, D=market value of the firm’s debt, V=E+D, E/V=percentage of financing that is equity, D/V=percentage of financing that is debt, Tc =corporate tax rate. Business investment rules include NPV
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Abstract A prototype 10-Mega Watts electricity central receiver plant located east of Barstow, California known as Solar Two. This plant was sponsored by a consortium of industries and utilities in partnership with the United States Department of Energy and thereafter in February 1997 began the regular production of electricity. The primary aspect of the evaluation of the performance process involves the financial analysis and the low-electricity analysis. The Solar Two is a 10 mega Watt electricity
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budgeting and capital structure decisions in depth. The responses to these questions enabled us to explore whether and how these corporate policies are interrelated. For example, we investigated whether companies that made more aggressive use of debt financing also tended to use more sophisticated capital budgeting techniques, perhaps because of their greater need for discipline and precision in the corporate investment process. More generally, the design of our survey allowed for a richer understanding
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Financial Analysis of PepsiCo By Juan Gallegos, Jr. Chief Financial Officer Current Ratio Our current ratio is .96; this ratio measures a company’s liquidity and its ability to meet its short-term debt obligations. By comparing a company’s current assets with its current liabilities, the current ratio reflects our ability to pay upcoming bills in the unlikely event of all creditors demanding payment at once. Our number indicates that we should be able to get $0.96 for every dollar we owe
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industry 1 2 Oversight of the financial position 2 2.1 Balance Sheet 2 2.2 (Comprehensive) Income Statement 4 2.3 Statement of Changes in Equity 5 3 Oversight of the statement of cash-flows 5 3.1 Cash flow from operating activities 5 3.2 Cash flow from investing activities and the Free cash flow 6 3.3 Cash flow from financing activities 7 4 Selected topics 7 4.1 Segment reporting 7 4.2 Leases 7 4.3 Provisions 7 4.4 Income taxes 8 5 Conclusion 8 Appendix
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4. [pic] 6. [pic] 7. The value of retained earnings is a part of the shareholder’s equity, and is reflected in the market value of equity. It should be included in the calculating the market value of equity. 8. All investors will receive their required rate of return. 9. As the WACC decreases due to the cost advantage of debt, the present value of the cash flows generated by the project will increase, consequently the NPV of the project will increase
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cf Capital Structure Ratios * Debt Equity Ratio : It indicates the relationship between the external equities or outsiders funds and the internal equities or shareholders funds. It is determined to ascertain soundness of the long term financial policies of the company. Significance : Debt to equity ratio indicates the proportionate claims of owners and the outsiders against the firm's assets. The purpose is to get an idea of the cushion available to outsiders on the
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BestCare HMO A. Du Pont Analysis ROE=Total Margin * Total Asset Turnover * Equity Multiplier Net Income = Net Income * Total Revenue * Total Assets Total Equity Total Revenue Total Assets Total Equity 1,218,000 = 1,218,000 * 28,613,000 * 9,869,000 2,118,000 28,613,000 9,869,000 2,118,000 = 4.25% * 2.899 * 4.65 =.575 or 57.5% Industry Average: ROE =3.8% *2.1 * 3.2 Industry Average ROE= 25.5% The total margin and total asset turnover
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| | | Liabilities & Stockholders' Equity | Current liabilities | | | | Notes payable | | $29,400 | | Income taxes payable | | 3,000 | | Salaries and wages payable | | 900 | | Interest payable | | 600 | | Total current liabilities | | | 33,900 | Long-term liabilities | | | | Bonds payable | | | 78,000 | Total liabilities | | | 111,900 | Stockholders' equity | | | | Common stock | | 70,000
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