The ROE for Sepracor is 33.07%, which means that 33.07 cents of assets are created for each dollar that was originally invested. It measures how Sepracor is using its money. The higher the return on equity, the more funds available to be invested in improving business operations without having to invest more capital. Debt to asset ratio measures the company’s solvency, and the higher the ratio, the lower the borrowing capacity for the company. I would make an investment in the company’s 5% convertible bonds.
Which of the following statements is CORRECT? Answer: e. If the interest rate the companies pay on their debt is less than their earning power. (BEP), then Company HD will have the higher ROE. 4. Muscarella Inc. has the following balance sheet and income statement data: Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 210,000 Total CL $ 70,000 Total CA $294,000 Long-term debt 70,000 Net fixed assets 126,000 Common equity $280,000 Total Assets $420,000 Total liab.
Hershey is larger company than Tootsie. The gap between them is evident in the free cash flow. Hershey is also able to leverage more. The current cash debt coverage ratio for Tootsie is greater implying that the cash flow from operating activities will pay for a higher proportion of current liabilities for Tootsie as compared to Hershey. The cash debt coverage ratio for Tootsie is higher indicating that the operating cash flow can meet a higher proportion of total liabilities.
This calculates how much of the business is financed through private investors; it is also expressed in percentage form. Generally speaking, as a firm's debt-to-equity ratio increases, it becomes more risky because if it becomes unable to meet its debt obligations, it will be forced into bankruptcy. (Glakas) Of the three companies, Wal-Mart has the lowest total debt ratio (.62) as well as the lowest overall debt to equity ratio (1.65). Target finds itself with similar footing at .65 and 1.89 respectively, however Kroger has over 80% of its operations (.81) financed with debt and has the worst three year average when it comes to debt to equity with 4.40 times.
LAST NAME: Merkozy Matrikelnummer: First Name: Angelus FLATLANDIA Country Factsheet April 2012 Executive Summary: (maximum 125 words) Flatland is a very open economy and characterized by a high share of industrial production in total value added (= basic characteristics). The country has achieved price stability and high growth und thus a substantial rise in living standards in the past decade (= something on long-term development). Flatland has, however, been seriously affected by the financial crises leading to a GDP growth of -8% (= short-run development). Fiscal and monetary policy reacted strongly to allow a speedy recovery. Restructuring of the financial sector is underway in which temporary nationalization of the banking
Delta has a high cost of equity ratio compared to its long term debt cost ratio. This is mainly because Delta has over 850 million shares of stock outstanding. Part II: Compute payback/NPV/IRR/MIRR Evaluate profitability of proposed new project and make recommendations The projected cash flows for the new route are as follows 1/: Year
This shows Targets improvement over time to pay its current liabilities based on available cash, short term investments, and receivables. Some items that may have impacted the quick ratio were a major increase in cash & equivalents as well as a generous increase in receivables from 2007 to 2008. Target’s quick ratio was higher than Wal-Mart’s quick ratio. This is an important comparison as Target’s ratio was higher than Wal-Mart’s regardless of the fact that Wal-Mart is a larger company that has traditionally outperformed
The liquidation value of the company is estimated at $18.277 million dollars; almost double that of its estimated value. Many of the values of the company are greatly influenced by the market to book ratio of its equity. Although the book value of equity is listed at $1 million, the market value is thought to be much higher, at $2.62 million. This estimate is greatly influenced by the market to book ratio of equity of competitors. 2.
Fiscal Policy Fiscal Policy The national debt is a consecutive sum of every deficit less every surplus, from the time when George Washington was president. During its 236 years, the United States has borrowed more money than it has saved, so the U.S. is in debt not only to its national citizens but also to foreign governments by about $15.8 trillion and rising (U.S. debt clock, 2012). The U.S. can borrow money through the Department of Treasury’s issuance of bonds, which acts as IOUs from the federal government. Because Treasury bonds are a safe investment, they are easily acquired on the open market by U.S. businesses and households as well as foreign governments, businesses, and households. The deficit and the debt are not the same thing
Goldman Sachs vs. U.S. Treasury Bond Goldman Sachs is one of the many investment banks in the U.S. that help companies and governments raise money in securities underwriting as well as provide advice on transactions dealing with mergers and acquisitions of corporations. Investment banks also provide advisory services to high net worth investors as well as broker/dealer operations. Investment banks in the United States hold a market share of 51 percent (even though that share has dropped recently.) However, Goldman Sachs is the leading global investment bank in the world. Their company falls into three categories: Investment Banking, Trading and Principal Investments, and Asset Management and Securities Services.