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.
In the leisure market, this may apply to businesses such as Clinton Cards. Clinton Cards has recently gone into administration due to falling sales caused by increasing online competition. It is likely that growth maximisation is its main objective at the moment in a bid to increase its already diminishing market share in an attempt to survive. Some other firms in the leisure market, such as , will have the objective of revenue maximisation. This is when the objective of the firm is achieving as high a total revenue as possible and occurs when marginal revenue is equal to zero, as shown on the graph.
Case Study 2 Lauren Grippo What indications occurred in the 2000 – 2006 housing market that a bubble bust was eminent? Within mainstream economics, it can be posed that that real estate bubbles cannot be identified as they occur and cannot or should not be prevented, with government and central bank policy rather cleaning up after the bubble bursts. The pre-dominating economic perspective is that economic bubbles result in a temporary boost in wealth and a redistribution of wealth. When prices increase, there is a positive wealth effect (property owners feel richer and spend more), and when they decline, there is a negative wealth effect (property owners feel poorer and spend less). Explain the concepts of loss aversion, value attribution, and group dynamics.
The profit percentage of assets varies by industry, but in general, the higher the ROA the better. We can see a good trend over years in the company. Comments: Return on equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity. The formula for ROE is: ROE is more than a measure of profit; it's a measure of efficiency. A rising ROE suggests that a company is increasing its ability to generate profit without needing as much capital.
Title: New Housing Era: 30-Year Mortgage May Fade. By: Appelbaum, Binyamin, New York Times, 03624331, 3/4/2011 Database: Academic Search Premier Section: National Desk WASHINGTON -- How might home buying change if the federal government shuts down the housing finance giants Fannie Mae and Freddie Mac? The 30-year fixed-rate mortgage loan, the steady favorite of American borrowers since the 1950s, could become a luxury product, housing experts on both sides of the political aisle say. Interest rates would rise for most borrowers, but urban and rural residents could see sharper increases than the coveted customers in the suburbs. Lenders could charge fees for popular features now taken for granted, like the ability to ''lock in''
By using this method the income statement shows a higher income due to the lower value of the cost of goods sold. The balance sheet would also show a higher value for the inventory that is on hand. ABC Company wanted to show that their expenses were lower and their income was higher than what it actually was, resulting in a higher retained earnings value at the end of the period. To the public, it would look as though the company is thriving and paying out larger dividends to stockholders. Stockholders may assume when reading the financial statements that they would be receiving a higher return each month or quarter when in reality that would not be the case especially if they are planning on switching to LIFO.
Feasibility of the project was also supported by an upturn in residential property market. The entrepreneurial endeavors in this case were deeper than the financial incentives, Ross was quoted that this was perhaps the last site that have “grand potential....., building’s that would define New York City.” With a 2.1 million sf. Of buildable FAR, the center would have more usable space than the Empire State Building. SRD relied heavily on its Joint Venture with Apollo Real Estate Advisors. Apollo would provide inflows of $255M in equity.
Explain your answers. a. If a firm in the industry wishes to increase total sales revenue (ignoring cost considerations), will it raise or lower its selling price? Why? The selling price would only increase because the absolute value of -2.5 is 2.5 which are greater than 1 meaning it is elastic and an increase in price leads to a reduction in total revenue.
The changes in the government’s macroeconomic objectives depends on where we are on the AS curve as shown below. If we are on the horizontal part of the AS curve, we will experience economic growth (from Y1 to Y2) without an increase in inflation so our competitiveness in the global market will remain the same so our trade deficit could improve. However, if we are on the curved part of the AS curve, we will have an increase in economic growth and there will be a demand pull inflation from P1 to P2. If we are at the vertical part of the AS curve, inflation will get higher but our economic growth remains the same as we have reached full productive
If the cash is higher than the net income, the company’s net income is of high quality. If the cash is lower than the net income, the company’s net income is not turning into cash and a red flag should go up. Having more cash than the net income can mean shareholders will receive an increase in dividends can reduce debt, buy back stocks, or purchase another company. According to, the cash flow statement Home Depot, Incorporated is similar to fiscal year 2007. In fiscal year 2008, Home Depot Incorporated generated $5.5 billion of cash flow from operations and used $2.0 billion to repay short-term debt and other obligations plus $1.8 billion for capital expenditures and $1.5 billion in dividends.