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? 6.
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This note was uploaded on 01/19/2011 for the course FINANCE fin300 taught by Professor Thomasrhee during the Fall '10 term at CSU Long Beach.

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

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