Income statement items as a percentage of ______________________. • 40 Suzie Q Corporation Balance Sheet December 31, 2011 Assets: Current Assets: Cash Accounts Rec. Inventory Total CA Fixed Assets: Net Fixed Assets Total Assets Liabilities & Equity: Current Liabilities: 12.5% Accts. Payable 21.9% Notes Payable Total CL 24.2% 58.6% Long‐term Debt: Common Stock 41.4% Retained Earnings 100.0% Total Liab. & S.E. $ 80 140 155 $375 265 $640 $ 95 110 $205 120 40 275 $640 14.8% 17.2% 32.0%
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unreasonably high. Usually, companies prefer raising capital in debt more than equity, because tax shield derived from debt makes debt more attractive to stock issue. And there will be an opportunity cost when a company holds a large sum of cash instead of investing it. What’s more, the shares will scatter if Blaine is all financed by issuing stocks. So there may be a potential problem that some private equity firm may purchase all of Blaine’s outstanding shares and takeover the BKI. In this
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analysis stool exists in the financial evaluation process, also in funds and currency investment. According to Chan, Jegadeesh, and Lakonishok J (1996) said, "it is a strategy that buying stocks in a high returns over the past three to twelve months, and selling those that had the poor returns over the same period." In the other words, the outperform stock will remain well but the underperform stock will continually worse (Fama & French, 1992). From the views from market- based
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ANSWERS TO QUESTIONS 1. Sustainable income is defined as the most likely level of income to be obtained in the future. It is the amount of regular income that a company can expect to earn from its normal operations. In order to distinguish a company’s net income from its sustainable income, irregular items, such as a once-in-a lifetime gain or discontinued operations, are reported separately on the income statement. 2. Items (a), (d), and (g) are extraordinary items; item (h) is debatable
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Lucky Godlstar. Financial statement overview These statements in review constitute the financial position of the Korean Firm LG Electronics as of September 3oth 2012. The statements under review are those of financial position, cash flow, owner’s equity, and the relevant financial reports. The statements relate to the company and its subsidiaries, referred to as the group. The statements review the performance of the company in 2012 as contrasted with 2011.The first item that catches the eye in the
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........1 1.1 Present Value ............................................................................................... 1 1.2 Future Value ................................................................................................ 2 Problems .............................................................................................................. 3 Chapter 2 Annuity ...................................................................4 2.1 Present Value
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decline in the inventory turnover ratio suggests that the firm's liquidity position is improving. a. True b. False Debt management ratios Answer: a Diff: E [vi]. The degree to which the managers of a firm attempt to magnify the returns to owners' capital through the use of financial leverage is captured in debt management ratios. a. True b. False TIE ratio Answer: a Diff: E [vii]. The times-interest-earned ratio is one indication of a firm's ability to meet
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of the critical events for Enron between August and December 2001—a saga of document shredding, restatements of earnings, regulatory investigations, a failed merger and the company ling for bankruptcy. We will assess how governance and incentive problems contributed to Enron’s rise and fall. A well-functioning capital market creates appropriate linkages of information, incentives and governance between managers and investors. This process is supposed to be carried out through a network of intermediaries
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1. Financial Statement Analysis 2. Financial Statement Analysis• Assessment of the firm’s past, present and future financial conditions• Done to find firm’s financial strengths and weaknesses• Primary Tools: – Financial Statements – Comparison of financial ratios to past, industry, sector and all firms 3. Objectives of Ratio Analysis• Standardize financial information for comparisons• Evaluate current operations• Compare performance with past performance• Compare performance against other
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is known for quality customer service and the ability of the firm to repair even instruments that are obscure by making them unique. Scope city made an initial public offer and it was a success especially because of their satisfied customers. The return of comet Halley made the sale of amateur telescopes increase in numbers. Average annual rates of growth for revenue and net income Revenue and income growth |Year |Revenue ‘$’ |Net income ‘$’ |Percentage
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