Shareholders - profitability, with secondary consideration given to debt utilization, liquidity, and other ratios. Since shareholders are the ultimate owners of the firm, they are primarily concerned with profits or the return on their investment. 2. a. Return on investment = Net income Total assets Inflation may cause net income to be overstated and total assets to be understated. Too high a ratio could be reported. b. Inventory turnover = Sales or COGS
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.............................................................................. 29 Topic 5: Commodities ........................................................................................................................... 48 Topic 6: Private Equity ........................................................................................................................ 54 Topic 7: Structured Products .............................................................................................
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COMPETITORS Goal of This Chapter: The purpose of this chapter is to discover what analytical tools can be applied to a bank’s financial statements so that management and the public can identify the most critical problems inside each bank and develop ways to deal with those problems • Key Topics in this Chapter • Stock Values and Profitability Ratios • Measuring Credit, Liquidity, and Other Risks • Measuring Operating Efficiency • Performance
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Partners Healthcare Case Aanlysis by az2311 | studymode.com Statement of Problem Partners Healthcare had established several financial resources pools, such as the short-term pool (STP) and the LTP, so that they can satisfy different needs of the several hospitals in the network. In more detail, the STP was invested with very high-quality, short-term fixed-income financial instruments. The average maturity of these instruments is about one to two years. STP is always treated as the risk-free part
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explanations of numerous ratios and percentages, however, we consider factors relevant to communicating useful information. 674 The Curious Accountant On May 14, 2007, DaimlerChrysler (DC) and Cerberus announced that Cerberus, a private-equity firm, was buying 80 percent of the Chrysler Group from DaimlerChrysler. The sale closed on August 3, 2007. Some analysts claimed the “sale” actually involved DaimlerChrysler paying Cerberus to take Chrysler off its hands. After the sale, DaimlerChrysler
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Pioneer Petroleum Corporation Ryan Rhodes Dr. Bacon February 18, 2009 Table of Contents Introduction Background……………………………………………………………….. Pg. 3 Major Problems……………………………………………………………. Pg. 5 Analysis Alternative Courses of Action………………………………………………Pg. 6 Analysis of Alternatives……………………………………………………. Pg. 6 Conclusion Suggested Course of Action………………………………………………... Pg. 8 Introduction Background Pioneer Petroleum was formed in 1924 with the merger of several
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Total assets Debt to equity: Total Liabilities Total equity You also can use S/T debt + L/T debt in the numerator Times Interest Earned: EBIT Interest Expense Profitability ratios: Indicate the ability to retain earnings or create growth after covering costs Gross Margin Percentage: Gross Margin Sales Profit Margin: Net Income Revenues Return on Assets: Net Income Total Assets Return on Common Equity: Net Income-Preferred dividends
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INTERNAL ANALYSIS (FINANCIAL ANALYSIS) Financial position of Proton Ratio's 2005 2006 2007 2008 2009 Profit margin 5.215 % 0.599 % -12.58 % 3.284 % -4.653 % Return on assets 5.00 % 0.562 % -8.486 % 2.531 % -4.25 % Return on equity 0.0753 % 0.00796 % -0.113 % 0.0341% -0.059% Receivable turnover 6.046 times 6.268 times 3.932 times 5.115 times 6.00 times Avg collection period 60 days 57 days 92 days 70 days 60 days Inventory turnover 8.8 times 5.6 times 3.7 times 5.1 times 4.7 times Fixed asset
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Let me begin this preface with a confession of a few of my own biases. First, I believe that theory and the models that flow from it should provide the tools to understand, analyze, and solve problems. The test of a model or theory then should not be based on its elegance but on its usefulness in problem solving. Second, there is little in corporate financial theory that is new and revolutionary. The core principles of corporate finance are common sense and have changed little over time. That
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Thinking Questions 1. It is the minimum rate of return the firm must earn overall on its existing assets. If it earns more than this, value is created. 2. Book values for debt are likely to be much closer to market values than are equity book values. 3. No. The cost of capital depends on the risk of the project, not the source of the money. 4. Interest expense is tax-deductible. There is no difference between pretax and aftertax equity costs. 5. The primary advantage of the DCF model
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