Calculate the following financial ratios. TIP: If you don't remember how to calculate financial ratios, review the Calculating Financial Ratio pages from Section 9, Lesson 2 of this course. a. A company makes a net profit before tax of $12,000 and has $20,000 in total equity. Calculate the company's return on equity as a percentage.
a. Adjusted trial balance b. Comparative balance sheets c. Current income statement d. Additional information 4. The primary purpose of the statement of cash flows is to a. provide information about the investing and financing activities during a period. b. prove that revenues exceed expenses if there is a net income.
(0.5 points) An income is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. 4. What is a projection? (0.5 points) A projection is a guess or estimate about what something will be like in the future. 5.
663 you decide Y O U D E C I D E | | Activity | 1. John Smith tax issues: a. How is the $300,000 treated for purposes of federal tax income? The $300,000 will have to be treated as ordinary employment income, subject to federal and state income taxes. b.
Once the predicted demand is frozen, L.L. Bean uses its historical demand and forecast data to analyze the forecasting errors. The forecast errors are calculated for each individual item and a frequency distribution of these is made, which is further used as a probability distribution for future errors. Thus, if 50% of the errors were within 0.7 and 1.6, the forecast for this year would be adjusted accordingly. Next, each item commitment quantity was calculated using its contribution margin and its total contribution in dollar to the revenue of the company.
Why is GDP a monetary measure? 5. Explain the difference between final and intermediate goods, and give an example of each. 6. Why do economists worry about “multiple counting” and calculate only the “value added” in the production process?
If you have i=10%, CF0= -1000, CF1=2000, CF3= 3000, CF3=5000 b. Turn Calculator on c. Go to APPS d. Press Finance e. Scroll down with arrow key to 7. NPV f. Press Enter g. The format of calculating PV of this kind of cash flow stream is (Rate, CF0, {CF List}, {CF Frequency}. In this example above, you will enter in the following format: (10, -1000, {2000, 3000,5000}) i. Hint- if there is no CF0, then Enter 0 in its place. h. Press enter to get Net Present Value of this stream.
(assume that partial units can be produced) b. Suppose the government imposes an excise tax of $20 per unit on this good. Find the new equation for the supply curve, the new equilibrium quantity, the post-tax price received by sellers, and the post-tax price paid by consumers. Indicate your answers on the graph above. c. What fraction of the economic burden of this tax is borne by consumers and what fraction is borne by sellers?
A1 of 3 Formulas involved on the WACC calculations Corporate Finance - MBA 2009 Note written by Prof. Carles Vergara-Alert & Prof. Pedro Saffi 1 Objective This note tries to clarify the different assumptions and formulas used to calculate the Weighted Average Cost Of Capital (WACC) that you will find in different textbooks and articles. 2 The WACC formula The WACC formula is a weigthed average of the cost of equity and the after-tax cost of debt: W ACC = E D+E RE + D D+E (1 − τ )RD (1) being RE the cost of equity, RD the cost of debt, τ the corporate tax, E the market value of the firm’s equity, and D the market value of the firm’s debt. Note that sometimes we call V to the sum of D and E, therefore, V = D + E. Sometimes, not all the financing is provided by debt and equity. As an example, let us assume that some financing is provided by preferred stock as well as equity and debt. The WACC formula has to be modified to include the main sources of long-term financing of the firm such as preferred stock: W ACC = E D P RE + (1 − τ )RD + RP D+E+P D+E+P D+E+P where RP is the cost of preferred stock and P is the market value of the firm’s preferred stock.
CASE 2 Vertical analysis, horizontal analysis, and financial ratios are all part of the financial statement analysis. Vertical analysis reports the amounts on the financial statement as a percentage of another item. The vertical analysis of the balance sheet is completed by restating every amount on the balance sheet as a percentage of the total assets. The total of the assets will now have to equal to a 100, and the restated amounts from the vertical analysis of the balance sheet will be presented as a common-size balance sheet. The vertical analysis of the income statement reports amounts as a percentage of sales.