Chapter 3 Analysis of Financial Statements ANSWERS TO END-OF-CHAPTER QUESTIONS 3-1 a. A liquidity ratio is a ratio that shows the relationship of a firm’s cash and other current assets to its current liabilities. The current ratio is found by dividing current assets by current liabilities. It indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future. The quick, or acid test, ratio is found by taking current assets less
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Introduction The stock market is comprised of two distinct markets, the primary and secondary market. While both of these markets may operate on the same exchange they are distinctively different. When making distinctions between a money and capital markets the primary determinant is time. Broadly speaking capital markets are for long term assets that extend beyond one year. This is in contrast to money markets that are used for short term assets that are up to one year. Learning Materials Primary
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15 = 10 = 1.5 = Equity Multiplier 10/2 = 5 = Total Asset turnover S/TA = 5; TA/E = 1.5 Question 3.11 Complete the balance sheet and sales information in the table that follows for Hoffmeister Industries using the following financial data: Debt ratio: 50% Quick ratio: 0.80 Total assets turnover: 1.5 Day’s sales outstanding: 36.5 days Gross profit margin on sales: (Sales-Cost of goods sold)/Sales = 25% Inventory turnover ratio: 5.0 Balance Sheet for Hoffmeister Industries
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As a financial manager researching investments for my client that align with its investment goals would be The Coca Cola Company. The Coca Cola Company has been around for years and everyone enjoys a Coke or a Coke product. 1. Provide a rationale for the U.S. publicity traded company that you selected, indicating the significant factors driving your decision as a financial manager. The significant factors that drove the decision, as a financial manager to look into The Coca Cola Company for my
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world usually asking. However, the answer is very easy, just take a look at the company’s account. The account is able to show every thing about the company. Also, in this paper, it will answer some questions about how to use accounting and financial management. Based on your analysis, determine which company is better able to pay current liabilities (debt). Explain your rationale. - First of all, both companies (Coca-Cola Enterprises and PepsiCo.) have net income lower than current liabilities
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Financial Management Adryanna A. Diaz Dr. Victoria Figiel BUS 508 Contemporary Business June 9, 2012 Search engines have become common and almost necessary in today’s society, and there are no shortages of available ones at your fingertips. One in particular is so popular that the term for using one is referred to by its ever so recognizable name, Google. “It is common knowledge that Google has millions of users who submit more than 250 million queries per day in dozens of languages. Google's
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ratios. (20 Marks) Discuss briefly, in your opinion, what the main causes of the current economic problems in Ireland are, and what steps should be taken to improve the economy. (20 Marks) Diploma in Logistics and Supply Chain Management Module 1: Financial Management Gary Doyle, Student Member, CILT 3 Budgeting Budgeting is one of the most important tasks undertaken in any organisation, whether it is a public or private company, a not-for-profit organisation, or any other group which must
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been defined in various ways. According to one commonly accepted definition. "Accounting is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are; in part at least, of financial character and interpreting the results thereof'. Another definition which is less restrictive interprets accounting as "The process of identifying, measuring and communicating economic information to permit informed judgements and decisions by the
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in operating capital Return of Invested Capital (ROIC) = NOPAT / Total Net Operating Capital Economic Value Added (EVA) = NOPAT- WACC * Total Net Operating Capital Market Value Added (MVA) = Market Value of stock - Book Value of Common Equity Financial Ratios Current Ratio = Current Asset / Current Liabilities Quick Ratio = (Current Asset – Inventory) / Current Liabilities Inventory Turnover Ratio = Sales / Inventory Days Sales Outstanding (DSO) = (Account Receivable/ Sales) x 365 Fixed Asset
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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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