Investors find this information lucrative because the more expendable cash a company has the more likely they are to pay out in dividends for the stock holders.. Liquidity Ratios: Current assets are a business's total current assets divided by its total current liabilities. Total Current Asset / Total Current liabilities 1,971,000 / 116,290 16.949 = 16.9 Current Ratio- 16.9:1 or 17:1 (16.9 to 1 or 17 to
Investors buy stock at the C. quoted ask price. 3. Which of the following statements is most correct? A. The stock valuation model, P0 = D1/ (i - g), can be used for firms which have negative growth rates.
This essay analyzed the information contained in Wal-Mart’s balance sheet and income statement and determined that the assets listed under the company’s current assets list were listed in the proper order. Also contained in this essay is how these assets are classified and how they are separated into the cash and cash equivalents. A comparison of the company’s total current liabilities at the end of its most recent annual reporting period with the total current liabilities at the end of the previous annual reporting period showed the continued growth of Wal-Mart. Finally, attention was placed on all the information within these documents and shown how this information is utilized by potential creditors, current investors, and prospective employees to seek out opportunities within the Wal-Mart
Current Ratio 2011 = Current Assets / Current liabilities Gaps Current Ratio = 4,309 / 2,128 = 2.0249 This means that The Gap Inc. is capable of paying its short-term liabilities two times by selling its current assets. What was the current ratio for 2010? How did the current ratio change? Current Ratio 2010 = 3,926 / 2,095 = 1.8739 The current Ratio for The Gap Inc. Increase from 1.8739 to 2.0249 What is the implication of that change? The current ratio increased because there was a considerable increase in Cash and other current assets.
Compute the book value weights that the comptroller currently uses for the company’s capital structure. Common stock weight 28.6% Preferred stock weight 14.3% Long-term debt 57.1% c. Based on the suggestion that the focus should be on market values, compute the weights of debt, preferred stock, and common stock. MV debt weight 19.4% MV preferred weight 4.2% MV common stock weight 76.3% d. Are book value or market value weights better for calculating the firm’s weighted average cost of capital? Market value weights are better for calculating the firms WACC because market value is the worth today and is more like the current situation and it can change daily. 2. a.
Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income. b. If the sales outlook for the coming three years were to increase to 30,000,000, the newly implemented system would prove valuable to B.E. Company. If production is kept the same, the company is predicted to sell every unit produced which would avoid a stockpile of inventory and also safeguarding an extra 5,000,000 units in ending inventory in case sales go above 30,000,000.
Fin 517 Ch. 15 Notes Debt and Taxes 15.1 The Interest Tax Deduction 1. interest tax shield – additional amount that a firm would have paid in taxes if it did not have leverage. Interest tax shield = corporate tax return X interest payments 2. because interest expense is tax deductible, leverage increases the total amount of income available to all investors 15.2 Valuing the Interest Tax Shield 1. when a firm uses debt, the interest tax shield provides a corporate tax benefit each year. 2. Because the cash flows of the levered firm are equal to the sum of the cash flows from the unlevered firm plus the interest tax shield, by the Law of One Price the same must be true for the present values of these cash flows.
The trends in are in percentage to evaluate the economic statistics for research in budget. Duke Energy has a trend in their balance sheet revealing that they usually pick up from one period to another, and then they decrease back down after they pick back up. When they were behind in current assets they decreased by 20% but then increased greatly by 100%. This analysis is provided to help build the income and make the statements greater so they can continue to try to pick up from where they left off
The increase was $0.83 per share or 32%. In the year before, $0.63 was the EPS; there was a goal that Disney wanted to meet and increasing their shareholder’s capital developing the ability to expand the organization. Time Value of Money is an initial building block for financial planning, and Walt Disney must have a comprehensive consideration of this perception to accomplish financial safety through this strategic initiative. Disney set goals that would quantify their cash amounts; there are five variables used to interrelate in any given circumstances. Existing and forthcoming value, number of compounding phases, periodic payments including interest rate; the amounts are the variables that are the degree, which influences the cost for Walt Disney’s initiative.
I would consider erosion of Jell-o cost as it is significant which is 20% and we have to consider that it is also growing at the same rate as powder market. This 20% erosion and with the growth rate, Jell-O could have got more than 20% even if the super project does not exist. * Allocation charges for excess capacity? * Considering the overall growth in the dessert market in future, there can be easily expected to use the unused capacity of Jell-O either by increase in sales of Jell-O or by another new product. This implies that this capacity is not lost and it has to be allocated to the super project if not the entire remaining capacity, it has to be atleast 80% of the