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

Uses and application of ratios, Uses and Application of Ratios Ratios ...

Uses and Application of Ratios Ratios are required in the following ways via managers in different firms. 1. Evaluating the efficiency of assets employment to generate sale

Hatch system - stock exchange, Hatch System - Stock Exchange This is a...

Hatch System - Stock Exchange This is an automatic system based on the assumption such when investors sell at a certain percent age below the top of the market and buys at a s

Cash and marketable securities management, Cash and Marketable Securities M...

Cash and Marketable Securities Management The management of marketable and cash securities is single of the key areas of working capital management. Because cash and marketabl

Drawback of stock repurchases, Drawback of Stock Repurchases 1. High ...

Drawback of Stock Repurchases 1. High price A company may find it not easy to repurchase shares at their recent value and price paid may be higher to the detriment of rem

Finance model paper questions, 1.  Suppose you would like to buy a house an...

1.  Suppose you would like to buy a house and you decided you can pay 3500 per month for 30 years.  Your bank has approved you for a 30-year fixed rate mortgage loan at a quoted AP

Determaine the dol and business risk, From the following selected operating...

From the following selected operating date, determaine the DOL. Which company has the greater amount of business risk? Why? Particulars A Ltd

State the generalised law of one price, Question: a) An oil well now pr...

Question: a) An oil well now produces 75000 barrels per year. The well will produce for 21 years more, but production will decline by 3.7% per year. Oil prices however, will in

Explain about commercial banks in depository institutions, Explain about co...

Explain about commercial banks in depository institutions. Commercial banks: Commercial banks accept deposits or liabilities to create loans or assets and to buy governme

State about the odd-lot dealer, State about the Odd-lot Dealer He/she...

State about the Odd-lot Dealer He/she specializes in buying and selling in amounts which are less than present trading units. They buy and sell odd lots, make them up into ma

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