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XYZ's operating margin is 15%, 14%, 12%, 8% for years 1,2,3,4 respectively. Where would you look to see if this is being cause by external factors or...


XYZ's operating margin is 15%, 14%, 12%, 8% for years 1,2,3,4 respectively. Where would you look to see if this is being cause by external factors or by internal factors?

 

ABC's capital turnover ratio 1.5x's; 1.6x's, 1.7x's, 1.8x's for years 1,2,3,4 respectively. How could you tell if this trend will continue in the future? What does this trend in the capital turnover indicate to the analyst?


When projecting future years, how should (or even should) the analyst project revenue growth from currency effects?


Company A and Company B are equal in every way and have equal competitive positions, projects, and starting positions. Management of Company A use a five year forecasting period and Company B uses a 10 year forecasting period. Which should have a higher net present value of future free cash flows (if any)?

 

Company A and Company B are equal in every way and have equal competitive positions, projects, and starting positions. The only difference is Company A has a lower weighted average cost of capital than Company B. Which company should have the higher intrinsic value?

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