FNCE 2121- Fundamentals of Finance
TRU ID - T00580498
Assignment 2 - Financial Analysis
Answer- Watson Company rations if relation to Industry Rations.
Growth in sales
Return on assets
Return on equity
1. Tables 1 through 5 contain the financial information describing the effects of level
production on inventory, cash flow, loan balances, and interest expense. Reproduce these
tables if Tim's suggestion were implemented; that is, change the Production Th
How does the marginal principle of retained earnings relate to the returns that a
stockholder may make in other investments?
The marginal principle of retained earnings suggests that the corporation must do
Corporate debt has been expanding very dramatically in the last three decades.
What has been the impact on interest coverage, particularly since 1977?
In 1977, the average U.S. manufacturing corporation had its intere
Chapter 05: Opcnuing and Financial Leverage
Operating and Financial Leverage
Discuss the various uses for break-even analysis.
S uch analysis :1llows the firm to determine at what level of operations it
will break even
Adam's Corporation Forecasting with Seasonal Production
Projected Unit Sales
1,500,000 1,700,000 1,200,000 1,400,000
+Desired Ending Inventory (2 months supply)2,900,000 2,600,000 3,400,000 4,500,000