Calculate financial ratios-evaluating financial statement

Assignment Help Financial Management
Reference no: EM13846276

It is often stated that anyone with a pencil can calculate financial ratios, but it takes a brain to interpret them. What kinds of things should the analyst keep in mind when evaluating the financial statements of a given firm?

Reference no: EM13846276

Questions Cloud

Enter variance as decimal and standard deviation : The rate of return on Cherry Jalopies, Inc., stock over the last five years was 23 percent, 11 percent, -5 percent, 7 percent, and 10 percent. Over the same period, the return on Straw Construction Company’s stock was 16 percent, 24 percent, -6 perce..
Established company with a traditionally based pay system : Assume you work for an old established company with a traditionally based pay system. Would you rather have a seniority-based pay system or a merit-based pay system and explain why?
Bond issued-what is the quoted annualized coupon rate : You are considering buying a bond issued by General Motors with exactly 5.5 years remaining to maturity that just paid a coupon yesterday. It rained on your paper this morning so you do not know what the coupon rate is. However you are able to see th..
Generate its first annual cash flow : You are building a pipeline which will generate its first annual cash flow of $2m exactly 5 years from today. As it ages, the volume it transports, and hence the cash flows it creates, will decline by 3% per year. Exactly 27 years from today, this pi..
Calculate financial ratios-evaluating financial statement : It is often stated that anyone with a pencil can calculate financial ratios, but it takes a brain to interpret them. What kinds of things should the analyst keep in mind when evaluating the financial statements of a given firm?
Emerge as major producer of computer software : Obsolete Computer Systems, Inc. wants to emerge as a major producer of computer software. The company has two options: Either it can purchase Upstart Software for $25m now whose products are expected to survive 5 years. As a member of Obsolete’s boar..
Purchase short-lived assets and frequently replace them : During periods of high inflation, U.S. firms have strong incentives to purchase short-lived assets and frequently replace them, rather than investing in long-lived assets. True, False, Uncertain and Explain
About the earnings per share : Assume a stock selling for $44.89 has a dividend yield of 3.1 percent and a PE ratio of 20.1. What is the earnings per share (EPS) for the company?
What is your annualized return from these two investments : Suppose you have $60,000 to invest. You’re considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $60 per share. You also notice that a call option with a $60 strike price and six months to maturity is available. MMEE pays..

Reviews

Write a Review

Financial Management Questions & Answers

  What the implicit cost of trade credit under these terms

Book Depot Inc. sells on terms of 1/15, net 70. What is the implicit cost of trade credit under these terms? Use a 365-day year. Round the answer to two decimal places in percentage form.

  Suggest how john could potentially solve his dilemma

Explain how applying for a ‘Low Doc Loan' could lead the mortgage broker to be accused of recommending an ‘unsuitable' product.

  What changes are occurring in international merger activity

Discuss the differences in merger practices between U.S. companies and companies in other countries. What changes are occurring in international merger activity, particularly in Western Europe and Japan?

  What is the yield that trevor would earn by selling bonds

Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $936.05. The bonds make semi-annual coupon payments at a rate of 8.4 percent. If the current price of the bonds is $1,048.77, what is the yield that Trevor would earn by sel..

  Receiving a fixed rate and paying a libor floating rate

You want to estimate the Fixed Rate for a $100M Notional, 3 year swap that has annual payments. You will be receiving a fixed rate and paying a LIBOR floating rate. The Spot rates for the next three years, based on the yield curve right now, are 6.5%..

  About the cash conversion cycle

Negus Enterprises has an inventory conversion period of 80 days, an average collection period of 47 days, and a payables deferral period of 40 days. Assume that cost of goods sold is 80% of sales. What is the length of the firm's cash conversion cycl..

  What were flotation costs as a fraction of funds raised

Moonscape has just completed an initial public offering. The firm sold 2 million shares at an offer price of $8 per share. The underwriting spread was $.6 a share. The price of the stock closed at $12 per share at the end of the first day of trading...

  Fixed selling and administrative costs

U.S. Telephone Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,040 per month, while fixed selling and administrativ..

  What was the firms 2011 operating cash flow or ocf

Suppose you also know that the firm's net capital spending for 2011 was $1,340,000, and that the firm reduced its net working capital investment by $63,000.

  Fixed costs-variable cost per unit-revenue per unit

Consider the following data: fixed costs = $10 million, variable cost per unit = $400, and revenue per unit = $1,200. For this organization, which of the following statements is most correct?

  Compute the firms price-earnings ratio

Reagan Corp. has reported a net income of $836,200 for the year. The company's share price is $13.03, and the company has 307,810 shares outstanding. Compute the firm's price-earnings ratio.

  What is the total return on this investment

One year ago, Neal purchased 3,600 shares of Franklin stock for $101,124. Today, he sold those shares for $26.60 a share. What is the total return on this investment if the dividend yield is 1.7 percent?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd