CLASS QUESTIONS 13DMWF

CLASS QUESTIONS 13DMWF - return on assets calculated? Would...

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CLASS QUESTIONS (13D) (1) Give a few examples of liquidity ratios. Turnover ratios for receivables and inventory, liquidity ratio, and current ratio (2) What s the formula for the accounts receivable turnover ? How is this used to calculate a company’s average collection period ? What specifically does this measure? Accounts receivable turnover = net credit sales/Average accounts receivable Average collection period = 365/accounts receivable turnover It measures the approximate amount of time that it takes for a business to receive payments owed, in terms of receivables, from its customers and clients (3) How is the
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Unformatted text preview: return on assets calculated? Would a company want this ratio to be higher or lower than its return on equity ? Why? It is calculated by dividing net income by total assets. You would want this ratio to be high because that would mean you are efficiently using the assets. (4) What is meant by outstanding shares in the calculation of earnings per share (EPS)? Stock currently held by investors, including restricted shares owned by the company’s officers and insiders, as well as those held by the public. Shares that have been repurchased by the company are not considered outstanding stock....
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This note was uploaded on 09/02/2011 for the course MGT 3305 taught by Professor Reed during the Spring '08 term at Baylor.

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