{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}


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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

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....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online