This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: turned into cash (can they meet short term obligations?) Current Ratio: Current Assets/Current Liabilities (want bigger than 1) 9491/6543=1.45 1.48 Acid Test: (stricter than current) 1.27 1.3 Efficiency Ratios: how effectively management runs the firm ( short term ) Days of Inventory= Inventories/cost of goods sold/365 400/25445/365=5.7 or 6 7 Days Receivable= Accounts Receivable / (revenue/365) 33 40 How long it takes to collect Days Payable How long it takes to Pay Financial Leverage: how much of long term assets are funded by debt vs. equity Long Term Debt to Equity=LT Debt/Equity 509/5622=0.09 0.10 Competitors have more debt EBIT/Interest 57.7 68 Profitability ROE= net income/common equity38 31 Size-Up External and Internal Econ/ind Op mgt, marketing, financial What do we tell Dell? 1yr eps looks good 3yr eps tumbles downward Long term cash flows drives stock price...
View Full Document
This note was uploaded on 05/23/2011 for the course BUSI 408 taught by Professor Croce during the Fall '08 term at UNC.
- Fall '08
- Corporate Finance