Analyse the difference in the roe of protect it

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Reference no: EM131032277

Question 1: Compute the following ratios for 2015.

Ratios	2015	Industry Average
Current ratio		1.23
Quick ratio		1.02
Inventory Turnover		16
Average Collection Period		42
Average payment period		100
Fixed Asset turnover		1.6
Total asset turnover		1.42
Debt ratio (Total liabilities/total assets)		38.65%
Assets/equity ratio (Equity Multiplier)		1.63
Long-term debt to stockholder equity		30.00%
Times Interest Earned Ratio		16.25
Gross profit margin		40.00%
Net profit margin		8.50%
Return on total assets		12.10%
Return on common equity		19.70%

Question 2: Analyse the difference in the ROE of Protect IT and the ROE of the Industry in 2015 through the relevant ratios.

Question 3: Calculate the weighted average cost of capital for the project.

Question 4: Calculate the initial investment on December 31, 2015.

Question 5: Calculate the cash flows for the years 2016 to 2020.

Question 6: Calculate the terminal cash flow at the end of year 2020.

Question 7: Calculate the net present value of this project and recommend whether the project should be undertaken.

Attachment:- Financial Mangement.rar

Reference no: EM131032277

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