The Weighted Average Cost of Capital is the average of the costs of a company's sources of financing-debt and equity, each of which is weighted by its respective use in the given situation. By taking a weighted average, it shows how much interest the company has to pay for every marginal dollar it finances. A firm's WACC is the overall required return on the firm as a whole and, it is often used internally by company directors to determine the economic feasibility of expansionary opportunities and mergers. Also, WACC is the appropriate discount rate to use in stock valuation. No, I don’t agree with Cohen’s WACC calculation.
Profitability ratios are one of the most frequently used in the financial ration analysis. We will use profitability ratios to determine Berry‟s Bug Blasters‟ bottom line, efficiency, and performance. This is done through analyzing asset turnovers, profit margin, Return on Assets, and Return on common stockholders‟ equity. Asset Ratio: determined by dividing sales revenue by total assets. In 2008, for every dollar of assets owned by Berry‟s Bug Blasters, they sold $1.68 worth of goods and services.
| cash conversion cycle | b. | inventory conversion period | c. | receivables collection period | d. | payables deferral period | e. | days sales outstanding | 6. The average length of time between the purchase of raw material and labor and the payment of cash for them is called the ____. a. | cash conversion cycle | b.
3. RETURN ON CAPITAL EMPLOYED (ROCE) NET PROFIT/CAPITAL EMPLOYED X 100 = % (NB use net profit figure before tax has been taken out) (For capital employed see Financed By total on Balance Sheet) Leave the formula in. Now add in the figures from the Income Statement or Balance sheet and calculate the ratio. Then describe what this ratio shows and explain what it means. LIQUIDITY 4.
Caladonia Products Integrative Problem FIN/370 May 21, 2011 Caladonia Products Integrative Problem Capital budgeting in corporations is the method that rejuvenates and revitalizes itself ,by adjusting previous projects to the present and discovering new ones ( Keown, Martin, Petty, & Scott, 2005). The method entails how a corporation determines whether projects such as building a new plant or investing in a long-term investment are of value (Capital Budgeting, n.d.). Often potential project's lifetime cash inflows and outflows are evaluated in order to decide whether the returns created meet an adequate target measure (Capital Budgeting, n.d.). The subject of this assignment is to prepare calculations and a response to Caladonia Products Integrative Problem. The methods used in this assignment are the payback period, NPV, IRR, and describing factors if Caladonia Products were doing a lease versus a buy will also be considered.
Common Stockholder's Equity) | | | | 8.46% | 2,430,872 ÷ (29,946,92 + 27,517,328 ÷ 2) 28,732,160 = 0.84604568 or 8.46 | Solvency Ratios A formulation used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. The formula is calculated by adding short-term and long-term debt and
I need help in figuring out the following: Use the information contained in Huffman Trucking Co. balance sheet and income statement to calculate the following ratios (balance sheet and income statements below: Liquidity ratios Current ratio Acid-test (quick) ratio Receivables turnover Inventory turnover Profitability ratios Asset turnover Profit margin Return on assets Return on common stockholders¿ equity Solvency ratios Debt to total assets Times interest earned Be sure to show your calculations for each ratio & prepare a horizontal and vertical analysis for the balance sheet and the income statement. Huffman Trucking Balance Sheet (Unaudited) December 31st 2006 2005 (In Thousands) Assets Current Assets Cash & Cash Equivalents Accounts
The balance sheet provided lists the Target Corporation’s assets as: cash, credit card receivables, inventory, land, buildings, fixtures and equipment, computer hardware and software, and construction in progress (United States Securities and Exchange Commission, 2013). After adjusting for the depreciation of their assets, the Target Corporation calculates their net assets at $48,163,000,000 (United States Securities and Exchange Commission, 2013). As
The last item that is listed on Ford’s cash flow statement is financing activities that include things or transactions that will affect liabilities that are long-term and the equity in stockholders accounts that include the pay out of dividends to these stockholders. This type of activity show the improvement in the capital assets and repayment of interest and principal balances between the investors in Ford Motor and the company itself. All
Target and JC Penny Corporations Columbia College Introduction The purpose of this overall project is to provide a financial analysis of the following ratios: Current Ratio, Acid Test Ratio, Deb Ratio, Debt/Equity Ratio, ROI, ROE, P/E Ratio, Dividend Yield, Dividend Payout Ratio, and Working Capital for Target Corporation and JC Penny. Analysis Current Ratio is defined as a liquidity ratio that measures a company’s ability to pay short-term obligations. Current Ratio is also known as liquidity ratio, cash asset ratio and cash ratio. The current ratio formula is: Current assets/current liabilities. |Target Corporation | |February 2013 |January 2012 |January 2011 |January 2010 |January 2009 | |16,388,000 |16,449,000 |17,213,000 |18,424,000 |17,488,000 | |14,031,000 |14,287,000 |10,070,000 |11,327,000 |10,512,000 | |= 1.16 |=1.15 |=1.70 |=1.62 |=1.66 | |JC Penny Corporation | |February 2013 |January 2012 |January 2011 |January 2010 |January 2009 | |4,833,000 |3,683,00 |5,081,000 |6,370,000 |6,652,000 | |2,846,000 |2,568,000 |2,756,000 |2,647,000 |3,249,000 | |=1.70 |=1.43 |=1.84 |=2.40 |=2.04 |