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Ratio analysis

# Ratio analysis - Sample problems-Ratio analysis 1 The...

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Sample problems Ratio analysis 1. The Charleston Company is a relatively small, privately owned firm. Last year the company had after- tax income of \$15,000, and 10,000 shares were outstanding. The owners were trying to determine the market value for the stock, prior to taking the company public. A similar firm which is publicly traded had a P/E ratio of 5.0. Using only the information given, estimate the market of one share of Charleston's stock. 2. Manufacturer's Inc. estimates that its interest charges for this year will be \$700 and that its net income will be \$3,000. Assuming its average tax rate is 30%, what is the company's estimated times interest earned ratio? 3. Given the following information, compute the value of cost of goods sold for Peterson Brewing Current liabilities \$340,000 Quick ratio 1.8x Inventory turnover 6x Current ratio 3.3x 4. ABC Co. has a Days Sales Outstanding ratio of 60 days. Total credit sales for the year were \$2,400,000. What is the balance in accounts receivable? 5. A firm has current assets of \$50,000 and total assets of \$250,000. The firm's sales are \$600,000. What is the firm's fixed asset turnover?

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Ratio analysis - Sample problems-Ratio analysis 1 The...

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