Jody Anderson - Problem Set 2 Fin 504 0501.xlsx - Earnings...

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Earnings436000Less Taxes0.4174400261600Less Preferred Stock Dividend 64000197600A. Earnings per Share170000 1.162353B. Retained EarningsNet Profits 2015261600Less Preffered Stock64000Common Stock136000136000Total Dividends Paid200000Retained Earnings Balance61600
A. Robert is comparing different industries in his ratios and therefore, the benchmarks for each company wouOne company make look better because of one of the ratios, but you cannot judge a company by one or two B. Fast-food and electricity would quickly turnover their inventory leading to lower ratios, whereas software atend to have long hold times on their inventories and therefore, higher current and quick ratios.C. The electrical company has high liquidity in its assets and can sell them quickly, whereas the software compD. In our last module, we learned about diversifying portfolios and the software company does is a risker inverate of return, it is a riskier segment of the market.
uld be different. ratios alone.and motor companies wouldpany does not.estment since is does have a higher
2012201320142015ACurrent Assets16950219002250027000Current Liabilities9000126001260017400Inventory6000690069007200Current Ratio1.881.741.791.55Quick Ratio1.221.191.241.14B.A decreasing quick ratio could mean that the company is experiencing decreasing sales and therefore, being forced to hold onto to inventory longer, hence the higher inventory numbers.C. My evaluation is in conflict with the industry numbers, Bauman has a quick turnaround on theirinventory compared to others in their industry.

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