FIN 419 Week 4 Individual Assignment - Scott Equipment Organization Paper

FIN 419 Week 4 Individual Assignment - Scott Equipment Organization Paper

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Week 4 – Scott Equipment Organization Paper
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Week 4 – Scott Equipment Organization Paper Determine the following for each policy: Expected rate of return on stockholders’ equity Net working capital position Current ratio The predictable or anticipated rate of return on stockholders’ equity varies from 6.89%, 6.81%, also 6.73% in support of the antagonistic, reasonable, as well as conventional procedures correspondingly. The net working capital point depicts immense distinctions from 6 million to 18 million. In conclusion, the present ratio ranges from 5:4, 5:3, and 5:2 intended for the antagonistic, reasonable, as well as conventional procedures correspondingly. Financial Policy Expected Rate of Return on Stockholders’ Equity Net Working Capital Position Current Ratio Aggressive or Antagonistic (large amount of short-term debt) 6.89% 6 million 5:4 Moderate or Reasonable (moderate amount of short-term debt) 6.81% 12 million 5:3 Conservative or Conventional (small amount of short-term debt) 6.73%
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 18 million 5:2 Profitability High Medium Low Risk Low Medium High Evaluate profitability versus risk trade-offs of these policies. Would you rate them low, medium, or high with respect to profitability? Would you rate them low, medium, or high with respect to risk? The above mentioned aggressive or antagonistic approach seems to be rated at higher side for the reason that the profit margins are at higher side that is related to the depositors equity, at average in moderate or reasonable, as well as less in conservative or reasonable intended for the similar calculation and analysis. The approach of liquidity is however at lesser side in aggressive or antagonistic method, however rated at lower side, high liquidity in moderate or reasonable as well as conservative or conventional might be evaluated to the antagonistic approach. Supported on the EAT in addition to arrival on equity, the aggressive or antagonistic procedure needs to be the most recommended technique....
View Full Document

Page1 / 3

FIN 419 Week 4 Individual Assignment - Scott Equipment Organization Paper

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online