Standard ratio analysis-compound growth rates, Finance Basics

Assignment Help:

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.


Related Discussions:- Standard ratio analysis-compound growth rates

Getting money, how i can get enough money with out doing any works ???????...

how i can get enough money with out doing any works ????????????

Risk-return trade-off, Risk-Return Trade-Off Most financial decisions ...

Risk-Return Trade-Off Most financial decisions comprise alternative courses of action. The choices have different returns and risk.  As like example, must we buy a replacement

Example of quantity discounts, Example of Quantity Discounts Consider ...

Example of Quantity Discounts Consider illustration one and suppose that a quantity discount of 5 percent is given whether a minimum 200 units is ordered. Required Fin

Journal entries, Sam start business with his savings $20000, a gift from hi...

Sam start business with his savings $20000, a gift from his parents $10000 and a personal loan from his friends of $5000. All money is deposited in a bank account.

Define financial factors that influence value of a business, List and expla...

List and explain the three financial factors that influence the value of a business. Ans: The three issues that influence the value of a firm's stock price are cash flow , ti

Financial cycle, what is the applicability of a financial cycle to poultry...

what is the applicability of a financial cycle to poultry?

Revenue Reserves - Retained Earnings, Revenue Reserves - Retained Earnings ...

Revenue Reserves - Retained Earnings These are undistributed earnings.  Those reserves are retained for the given reasons like: A. To create up for the fall in profits so a

Determining the rules for resolving conflict, Instructions: Read the Herzbe...

Instructions: Read the Herzberg findings related to extrinsic and intrinsic factors driving job satisfaction, dissatisfaction and motivation. To what extent should employers feel r

Advantage of leasing an asset, Advantage of Leasing an Asset 1. ...

Advantage of Leasing an Asset 1. The company has the choice to purchase assets on the expiry of the lease period at that time it will identify the viability of the asset

Return on the annuity, An insurance company offers you and end of year annu...

An insurance company offers you and end of year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9%. What is the most you would be willin

Write Your Message!

Captcha
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