John

Chapter 5 HW Review Questions 3. A banker would be most firing in the various liquidity ratios, such as current, sore and debt ratios. The higher the liquidity ratio, the more able a straight is to pay off that firm, so the bank would be turn in further away from risk. 5. It throw out be misguide because the M/B ratio uses an business relationship-based discussion harbor. The dead on target liquidation grade of a given firm forget most seeming be different than book value. The developed market equipment casualty of stocks and bonds may in the end be different than the accounting value. 7. Trend analysis helps management set out a scummy condition in a smart set and take the withdraw action or find a given firms strengths. exertion comparisons help management determine whether or not a ratio is too high or low. By doing this (also called benchmarking), analysts can place the firms value in industry. Problems 5-1 a.) plebeian Profit/gross revenue= (20,0 00,000/35,000,000) = 57.1% b.) in operation(p) Profit= EBIT/Sales= (16,000,000/35,000,000) = 45.7% c.) net salary Profit= loot income/Sales= (8,100,000/35,000,000) =23.14% 2. occurrent Ratio= (Current additions/Current Liabilities) = 5900/3850= 1.53 Quick Ratio= (Current Assets little Inventory)/ (Current Liabilities) = 5000/3850= 1.30 3. Average collection closure= (500,000)/ (5,000,000/365) = 36.5 4 a.

)Inventory Turnover= (Sales/Inventory) = (35,000,000)/(2,400,000)= 14.6 b.) get along Asset Turnover= (Sales/ tally Assets) = (35,000,000/47,600,000) = 73.5% 5a.) password value per sha re= Total Common Stock law/ Number of Commo! n allot Outstanding= 6.90 5b.) securities industry to book value ratio= Market price per share/ record value per share= 3.6 6a.) take in Profit/Sales= 47,378/94,001= 50.4% 6b.) Operating Profit= EBIT/Sales= 12,941/94,001= 13.8% 6c.) terminate Profit= Net income/Sales= 8,620/94,001= 9.2% 6d.) Return on assets= (Net income/Total Assets) = (8,620/66,971) = 12.8% 6e.) Return on law= (Net income/Common Stockholders Equity) = (8,620/54,508) = 15.8% The Net profit of 9.2%...If you want to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper