Standard ratio analysis-compound growth rates, Finance Basics

Standard ratio analysis should be used to supplement the discussion of strength and weakness.

The following ratios are most often used by practitioners:

(a) Growth Rates: PEG Ratio and 10 year or 5 year compound growth rates (CAGR) in Sales and EPS of the two companies prior to the merger.

(b) Liquidity Ratios

(c) Leverage Ratios:

(i) Book Value of Total Debt/Book Value of Equity

(ii) Book Value of Long-term Debt/Book Equity

(iii) Book Value of Total Debt/Market Value of Equity

(iv) Interest and other fixed charge Coverage Ratio

(d) Operating Characteristics:

(i) Total Asset Turnover

(ii) Average Collection Period

(iii) Gross Profit Margin

(iv) ROE and ROA

(e) Investment Characteristics:

(i) Capital Expenditure as a percentage of Total Asset

(ii) R&D as a percentage of Total Assets

Most of these ratios are available from Bloomberg, Standard and Poor's Industry Survey, or similar sources. You may also access WRDS for relevant information.

Posted Date: 3/7/2013 5:41:34 AM | Location : United States







Related Discussions:- Standard ratio analysis-compound growth rates, Assignment Help, Ask Question on Standard ratio analysis-compound growth rates, Get Answer, Expert's Help, Standard ratio analysis-compound growth rates Discussions

Write discussion on Standard ratio analysis-compound growth rates
Your posts are moderated
Related Questions
Briefly define the terms proprietorship, partnership, and corporation. Ans: The term proprietorship is used as a business owned by one person. Two or more than two people wh

Discuss the necessity of risk adjusted hurdle rates for companies with diverse lines of business. Every company invests in new projects based on the expectation of earnings

Cash and Bonus Issue - Dividend For a firm to pay cash dividends, it should contain adequate liquid funds.Though, under conditions of liquidity and financial constraints, a fi

A new pet shop wants to apportion their investment money $132,000 for advertising, building upgrades, and education in the ratio of 5:4:3. How much money does each category get app

Example of Miller-Orr Model XYZ's management has put the minimum cash balance to be equivalent to Sh.10, 000. The standard deviation of daily cash flow is of Sh.2, 500 and the

Which of the following is true with regards to rising interest rates. A. Use long-term loans to take advantage of current low rates. B. The term of the loan is ot impacted by risin

What is the effective annual cost of skipping the discount and paying at the end of the net period for the following credit terms: 6/10, net 70? please show work"

discuss the three approaches to the short -term financing problem and provide relevant examples of each.

Measuring Business Performance Definition Financial analysis is a process via that finance identifies the company's financial performances with comparing the entities in

Stock Exchange Market The Idea and improvement of a Stock Exchange Stock exchange also identified as stock markets are special "market places" whereas already held bond