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Unformatted text preview: 31 20 = RECEV/$20,000$20000*20= RECEVRECEV = $400,000 32 Debt ratio = 1equity ratio Equity ratio = 1/Equity multiplier Em=2.5 1/2.5=ERER=.4 1.4=Debt ratio DR=.6 or 60% 33 BVPS=CE/SO M/B ratio=MPPS/BVPS CE= 6 BILLION SO=800 MILLION MPPS=$756000/800=bvps =7.5 $75/$7.50=M/B RATIO = 10.0 34 PRICE/EARNINGS RATIOPE RATIO =PRICE PER SHARE/EARNINGS PER SHARE PE=PPS/EPS EPS=1.50 CFPS=3.00 P/C RATIO= 8.0 , P/C RATIO= PPS/CFPS , 8.0=PPS/3.00 =3.00*8.00=PPS ,PPS=24.00 p/e RATIO = 24.00/EPS, 24.00/1.5, P/E RATIO = 16.0 35 ROE = Profit Margin (Profit/Sales) * Total Asset Turnover (Sales/Assets) * Equity Multiplier (Assets/Equity) PM 3% EM=2.0 SALES=100 MILLION TOTAL ASSETS=50 MILLION TOTAL ASSET TURNOVER= SALES/ASSETS TAT= 100m/50M= 2MIL ROE= Pm=.03*TAT=2MIL*EM=2.0, ROE=.03*2MIL*2.0, ROE= .12 OR 12% 36 ROA=10%, PM=2%, ROE=15% TOTAL ASSET TURNOVER ROA=PM*TAT TAT = ROA/PM, TAT=.10/.02, TAT=5.0 EQUITY MULTIPLIER ROE=ROA*EM EM=ROE/ROA, EM=.15/.10, EM=1.5 37 CURRENT ASSETS=3MIL , CURRENT RATIO=1.5, QUICK RATIO=1.0 CURRENT LIABILITES CR=CA/CL 1.5=3MIL/CL, CL*1.5=3MIL, CL=3MIL/1.5 CURRENT LIABILITES= 2 MIL LEVEL OF INVENTORIES QR=CURRENT ASSETSINVENTORIES/CURRENT LIABILITES 1.0=3MILINV/2MIL, 1.0*2MIL=3MILINV, 2MIL3MIL=INV LEVEL OF INVETORIES =1MIL 41 FV1=PV+INT =PV+PV(I) =PV(1+I) =10,000(1+.10)=10,000(1.10)=11000 FV5=10,000(1.10)5= 16105.1 42 PV=FVn/(1+I)n Pv=1292.09 46 Year 00 Year 1=300 Year 2=300(1.07)1=321 Year3=300(1.07)2=343.47 Year 4=300(1.07)3=367.51 Year 5=300(1.07)4=393.24 FV =1725.22 Amount due would be 1845.99 413 a) 400 per year at 10% for 10 years =2457.83 b) 200 per year at 5% for 5 years= 865.90 c)400 per year at 0% for 5 years= 2000 d) rework parts a,b,c, assuming that payments are madeat the beginning of each year that is they are annuities due A)2703.61 B)909.20 C)2000 414 Year Cash Stream A Cash Stream B 1 100 300 2 400 400 3 400 400 4 400 400 5 300 100 PresentValue 8% $1,251.25 $1,300.32 PresentValue 0% $1,600.00 $1,600.00 ...
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 Spring '10
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