Financial Analysis * The tax rate is approximately 30% 5.618.8=29.79% 5.418.1=29.83% 5.418=30% * Based on the industry average, a sports store of similar size should be making around $21000 or 67% more profitable than Rhodes’ store. * Assuming the lots are of the same size and bear the same tax burden, if the unused lot is sold off property taxes would be reduced by $6000 at the 2008 rate. All else being equal, this would increase net profit by 6000×0.30=$1800, for a total of $14400. Profit as a percentage of sales would increase from 2.1% to 2.4%. * Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest.
Profit Maximization is the process that a firm uses to establish where the best output and price levels are, in order to maximize its return. There are two primary methods that can be used to establish profit maximization. One method is the Marginal Revenue minus the Marginal Cost (MR-MC) method. When utilizing this method economists assume that profit would be at its highest when MR and MC are equal, which denotes that for every item made MP=MR-MC. When / if MR is higher than MC then MP would result in a profit for Company A.
The gross profit ratio (gross profit divided by net sales) also indicates how well selling prices provide for expenses in an organization (Kimmel, Weygandt, & Kieso, 2009). The return on assets ratio (net income divided by average total assets) indicates how well an organization employs its assets. The asset turnover ratio (net sales divided by average total assets) further indicates asset utilization to produce sales (Kimmel, Weygandt, & Kieso, 2009). TRI profitability ratios are presented in Table Three, below. Ratio analysis for TRI illustrates conservative debt levels and ability to service additional debt.
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
P5; The Trading Account; The trading account is an account that shows profits and losses for a business. There are three parts to the trading account, the first one is sales turnover and this is the money that is coming into the business by trading. The formula for sales turnover is quantity sold x the selling price. According to business alpha the sales turnover for this business is 3,057,000. The second component is the cost of sales which includes the costs directly linked to providing the trade.
Commissioner 84 F.2d, 453/455 1936 can be used in the analysis of Mr. Kim’s salary using the independent investor approach on equity. Unlike in the previous approach where it was proved that Kim’s salary is reasonable owing to the five factors enumerated in the Elliott case; this approach considers this salary unreasonable. According to the approach, the salary that the CEO gets is very high because it covers over 80% of the total profit the company makes. This is because; if the CEO gets all this money, there will be a serious effect on the returns on equity of the arm’s length investor. 26 U.S.C.
Page 484 has formulas!! 6. When the firms maintains a target leverage ratio, we compute its levered value V^L as the present value of its free cash flows using the WACC, whereas its unlevered value V^U is the present value of its free cash flows using its unlevered cost of capital or pretax WACC. 15.3 Recapitalizing to Capture the Tax Shield 1. when securities are fairly priced, the original shareholders of a firm capture the full benefit of the interest tax shield from an increase in leverage 15.4 Personal
As the time horizon increases, variable costs rely less on existing factors and restrictions and therefore will begin behaving differently which will in turn affect the cost of production (Wright, 2007). The second way a firm that’s into profit maximization can decide its greatest level of output is by way of the marginal revenue -- marginal cost method. This is done by subtracting the marginal cost from the marginal revenue that a product generates. Using marginal cost and marginal revenue as the bases, profit maximization will be obtained at the point when marginal revenue is equal to marginal cost. If the marginal revenue is greater than marginal cost this would be when a profit maximizing firm would need to increase production until marginal revenue is equal to marginal cost.
C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years. Compounded interest allows for more money that simple interest would. 2. A) If the individual retires at the age of 65, having started the program at age 40, there would be $219,318 in the account. $3,000 x (8% in 25 years) 3000 x 73.106 = $219,318 B) If
Currently, CMS Energy financial perspective defined by the profit margin is at 7.20%. The shareholder value is defined by the dividends that are paid to the shareholders who are currently at 55.00%. By including the Mega Meter into the daily operations, stock prices would rise from 2.82 per share because of the advantages that using this meter with the prevention of