homework - economy be worse off without them 14-5 What are...

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3-5B (Using financial ratios) Brenda Smith, Inc. had a gross profit margin (gross profits / sales) of 25 percent and sales of $9.75 million last year. Seventy-five percent of the firm’s sales are on credit and the remainder are cash sales. Smith’s current assets equal $1,550,000, its current liabilities equal $300,000 and it has $150,000 in cash plus marketable securities. A. If Smith’s account are $562,500 what is its average collection period? B. If Smith reduces its average collection period to 20 days, what will be its new level of accounts receivable? C. Smith’s inventory turnover ratio is eight times. What is the level of Smith’s inventories? 14-1 What are financial markets? What function do they perform? How would an
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Unformatted text preview: economy be worse off without them? 14-5 What are the general categories examined by an organized exchange in determining whether an applicant firm’s securities can be listed on it? (Specific numbers are not needed here, but rather areas of investigation) 14-7 What is an investment banker, and what major functions does he or she perform? 14-10 Why might a large corporation want to raise long-term capital through a private placement rather than a public offering? 14-11 As a recent business school graduate you work directly for the corporate treasurer. Your corporation is going to issue a new security plan and is concerned with the probable flotation costs. What tendencies about flotation costs can you relate to the treasurer?...
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