Roa pm sta nia nis sta 12 5 sta sta 240 roe pm sta

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Blueprint Reading for Welders
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Chapter 6 / Exercise 23
Blueprint Reading for Welders
Bennett/Siy
Expert Verified
ROA = PM S/TA NI/A = NI/S S/TA 12% = 5% S/TA S/TA = 2.40. ROE = PM S/TA TA/E NI/E = NI/S S/TA TA/E 20% = 5% 2.4 TA/E 20% = 12% TA/E TA/E = 1.67. 10
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Blueprint Reading for Welders
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Chapter 6 / Exercise 23
Blueprint Reading for Welders
Bennett/Siy
Expert Verified
3-13 a. (Dollar amounts in thousands.) Industry Firm Average = 00 5 , 453 , 1 $ ,000 925 , 2 $ = 2.01 2.0 5 36 Sales/ receivable Accounts = 548 , 20 $ 000 , 575 , 1 $ = 77 days 35 days Inventory COGS = 000 , 125 , 1 $ 000 , 375 , 6 $ = 5.67 6.7 assets Fixed Sales = 000 , 350 , 1 $ 000 , 500 , 7 $ = 5.56 12.1 assets Total Sales = 000 , 275 , 4 $ 000 , 500 , 7 $ = 1.75 3.0 Sales income Net = 000 , 500 , 7 $ 022 , 113 $ = 1.5% 1.2% 11
assets Total income Net = 000 , 275 , 4 $ 022 , 113 $ = 2.6% 3.6% equity Common income Net = 750 , 752 , 1 $ 022 , 113 $ = 6.4% 9.0% = 000 , 275 , 4 $ 384 , 395 , 1 $ = 33% 30% 000 , 275 , 4 $ 250 , 522 , 2 $ = 59% 60.0% b. For the firm,
c. The firm’s days sales outstanding is more than twice as long as the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy.
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assets decreased, or both. While the company’s profit margin is higher than the industry average, its other profitability ratios are low compared to the industry--net income should be higher given the amount of equity and assets. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. Chapter 4 Time Value of Money ANSWERS TO END-OF-CHAPTER QUESTIONS 4-1 a. PV (present value) is the value today of a future payment, or stream of payments, discounted at the appropriate rate of interest. PV is also the beginning amount that will grow to some future value. The parameter i is the periodic interest rate that an account pays. The parameter INT is the dollars of interest earned each period. FV n (future value) is the ending amount in an account, where n is the number of periods the money is left in the account. PVA n is the value today of a future stream of equal payments (an annuity) and FVA n is the ending value of a stream of equal payments, where n is the number of payments of the annuity. PMT is equal to the dollar amount of an equal, or constant cash flow (an annuity). In the EAR equation, m is used to denote the number of compounding periods per year, while i Nom is the nominal, or quoted, interest rate. b. The opportunity cost rate (i) of an investment is the rate of return available on the best alternative investment of similar risk.

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