Helping tags: Accounting....WILL UPVOTE, just pls help me answer this section with 3 subparts. Thank you. ? 4. This tells you what part of each peso of sales the company retained asprofit. It is a very handy guide in comparing the earnings of thisyear with previous years to determine the earnings trend of thecompany. It is also very valueble in comparing earnings of the companywith that of other companies in the same industry.Yield on investmentb. Eainings per share of stockC.a.Margin of profitInventory turnoverReturn on total essetserid d.e. low. It tells you how many times during the year the. average inverntorywas sold and enables you to compure stock inventories of Lhe compyLoo high of t5.This ratio tella whether the compuny's invenlory4.with that of olhor comparnies in the same industry.Inventory divided by total asselsb.Quick assets divided by current liabililiesCost 'of goods sold and expenses divided by current asselsd.8.Cost of goods sold divided by net salesCost of sales divided by average inventorytrade receivables used in the calculation of each otс.е.6.How arefollowing?Acid test(quick) ratioNumeratorb.ReceivableturnoverNumeratorDenominatorDenominatorNumeratora.NumeratorDenominatorNot usedc.d.

Ratio analysis includes computing of rations by using financial statements elements to compare one…

4. This tells you what part of each peso of sales the company retained as profit. It is a very handy guide in comparing the earnings of this year with previous years to determine the earnings trend of the company. It is also very valueble in comparing earnings of the company with that of other companies in the same industry. Yield on investment b. Eainings per share of stock Margin of profit er1 d. Inventory turnover Return on total assets a. C. e.

4. This tells you what part of each peso of sales the company retained as profit. It is a very handy guide in comparing the earnings of this year with previous years to determine the earnings trend of the company. It is also very valueble in comparing earnings of the company with that of other companies in the same industry. Yield on investment b. Eainings per share of stock Margin of profit er1 d. Inventory turnover Return on total assets a. C. e.

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

9th Edition

ISBN:9781305635937

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter4: Analysis Of Financial Statements

Section: Chapter Questions

Problem 3DQ: Looking at Morningstars Profitability ratios, what has happened to Hewlett Packards profit margin...

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Looking at Morningstars Profitability ratios, what has happened to Hewlett Packards profit margin (net margin %) over the past 10 years? What has happened to its return on assets (ROA) and return on equity (ROE) over the past 10 years?
Requirement 1. Compute the following ratios for both companies for the current year, and decide which company’s stock better fits your investment strategy. a. Acid-test ratio b. Inventory turnover c. Days’ sales in receivables d. Debt ratio e. Earnings per share of common stock f. Price/earnings ratio g. Dividend payout
5. Profitability ratios Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitability ratios of Diusitech Inc. and make comments on its second-year performance as compared with its first-year performance. The following shows Diusitech Inc.'s income statement for the last two years. The company had assets of $4,700 million in the first year and $7,518 million in the second year. Common equity was equal to $2,500 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. In addition, the firm did not issue new stock during either year. Diusitech Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 2,540 2,000 1,610 1,495 127 80 1,737 803 80 723 181 542 Net Sales Operating costs except depreciation and…
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The process of communicating information that is relevant to investors, creditors, and others in making investment, credit, and similar decisions. The portion of total assets provided by stockholders' equity, computed as stockholders' equity divided by total assets. Refers to how productive a company is in using its assets. It is usually measured relative to how much revenue is generated for a certain level of assets. 1. Comparative Statement The application of analytical tools to general- purpose financial statements and related 2. Financial Reporting 3. Liquidity data for making business decisions. 4. Vertical Analysis Refers to the availability 5. Financial Statement Analysis of resources to meet short-term cash 6. Efficiency requirements. 7. Solvency Refers to a company's long-run financial viability and its ability to cover long-term obligations. 8. Equity Ratio 9. Profitability Comparative financial statements in which each 10. Common-size Statements amount is expressed as a…
ermine to which formula does each of the following refers: , Significance of Financial Ratios Used to Measure Profitability h. Profitability in the use of working capital Amount of profit per peso of sales Profit per peso of current assets every time 3. i. Overvaluation or undervaluation of stock b. j. Rate at which owner's equity is being used current assets are used k. Amount of actual returns per share of Rate at which earnings per share are capitalized d. Earnings of the corporation on a per share of capital stock basis Number of times average current assets are C. common stock Efficiency in the use of total resources m. Numbers of times working capital is used Portion of sales absorbed by operating costs Profitability in the use of invested capital Profit earned every time working capital is 1. n. e. 0. used p. f. Ratio of distributed earnings to earnings per used share q. Profitability in the use of current assets Insufficiency of current assets g. Adequacy of markup on sales r.
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Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitability ratios of Spandust Industries Inc. and make comments on its second-year performance as compared with its first-year performance. The following shows Spandust Industries Inc.’s income statement for the last two years. The company had assets of $7,050 million in the first year and $11,278 million in the second year. Common equity was equal to $3,750 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. In addition, the firm did not issue new stock during either year. Spandust Industries Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 3,810 3,000 Operating costs except depreciation and amortization 1,855 1,723…
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Profitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm. Your boss has asked you to calculate the profitability ratios of Diusitech Inc. and make comments on its second-year performance as compared with its first-year performance. The following shows Diusitech Inc.’s income statement for the last two years. The company had assets of $10,575 million in the first year and $16,916 million in the second year. Common equity was equal to $5,625 million in the first year, and the company distributed 100% of its earnings out as dividends during the first and the second years. In addition, the firm did not issue new stock during either year. Diusitech Inc. Income Statement For the Year Ending on December 31 (Millions of dollars) Year 2 Year 1 Net Sales 5,715 4,500 Operating costs except depreciation and amortization 1,365 1,268 Depreciation and…
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