RATIO ANALYSIS
Review the financial information pertaining to Salco Inc. in Study Problem 4-10 on pages 113 and 114 of you text. Answer the following questions in an Excel document. Solve using Excel formulas (preferred) or clearly write out the steps you took to calculate your answers. Round any dollar amounts to the nearest dollar ($1,500,074) and any percentages to two decimals (9.56%).
QUESTION 1
Calculate Salco’s total asset turnover, operating profit margin, and operating return on assets.

ANSWER 1
Total Asset TurnoverOperating Profit MarginOperating Return on Assets

Formula: Total Asset Turnover = Sales/ Total AssetsFormula: Operating Profit Margins= Operating Profits/ SalesFormula: Operating Return on Assets= Operating Profit Margin x Total Asset Turnover 4500000/ 2000000500,000 / 4,500,000 =.1111x2.25

2.2511%25%

Note: I added net fixed assets and current assets for total assets.Note: Operating profits= EBITDA

QUESTION 2
Salco plans to renovate one of its plants, which will require an added investment in plant and equipment of $1 million. The firm will maintain its present debt ratio of .5 when financing the new investment and expects sales to remain constant. The operating profit margin will rise to 13 percent. What will be the new operating return on assets for Salco after the plant’s renovation?

ANSWER 2
Operating Return on Assets

Formula: Operating Return on Assets= Operating Profit Margin x Total Asset Turnover Operating Return on Assets = .13 x X
Operating Return on Assets =.13 x 1.5
19.50%

Note: Total Asset Turnover
Formula: Total Asset Turnover = Sales/ Total Assets
4,500,000/ 2,000,000 + 1,000,000=1.5

QUESTION 3
Given that the plant renovation in part b occurs and Salco’s interest expense rises by $50,000 per year, what will be the return earned on the common stockholders’ investment? Compare this rate of return with that earned...

...
Question 1
(5 points) $100 today is worth the SAME as $100 tomorrow.
True
False
Question 2
(5 points) $100 invested for 10 years at 12% interest is worth more in FV terms than $200 invested for 10 years at 4% interest.
True
False
Question 3
(5 points) Shawn wants to buy a new telescope. He estimates that it will take him one year to save the money and that the telescope will cost $200. At an interest rate of 6%, how much does Shawn need to set aside today to purchase...

...FIN 612 Managerial FinanceWeek One Assignment
Your assignment for this week is to complete the following questions and problems from Chapter 1. Please submit your complete assignment in the course room by the due date.
Chapter 1 Questions
(1-1) Define each of the following terms:
a. Limited partnership-a partnership in which limited partners’ liabilities, investment...

...Total Book Equity / Number of Shares Profit Margin (PM) = Net Income / Sales
Net Operating Working Capital (NOWC) = Current Assets - (Current Liabilities - Notes Payable) Equity Multiplier = Assets / Equity
Free Cash Flow (FCF) = EBIT (1 -T) + Dep. - (Capex + ∆NOWC) Total Asset Turnover (TATO) = Sales / Total Assets
Market Value of Equity = Stock Price x Number of Shares - Total Book Value of Equity Total Amount of Debt = Target Debt to Asset Ratio %...

...Question 1 | | 1 / 1 point |
To save for her newborn son's college education, Lea Wilson will invest $1,000 at the beginning of each year for the next 18 years. The interest rate is 12 percent. What is the future value?
Question options:
| 1) | $7,690 |
| 2) | $34,931 |
| 3) | $63,440 |
| 4) | $55,750 |
Question 2 | | 1 / 1 point |
Sharon Smith will receive $1 million in 50...

...follow.
Balance Sheet
ZZZ Mattress Company
December 31, 2010
Answer sheet for Problem A:
Historical and Industry Average Ratios
Cedric, Deniece, and Vhong, Inc.
Ratio
2003
2004
2005
Industry 2005
1.Current Ratio
1.6
1.7
1.67
1.6
2.Quick Ratio
0.9
1.0
0.96
0.9
3.Inventory Turnover
8.1
9.3
7
8.4
4.Average Collection Period
33 days
37 days
41.57/42days
39 days
5.Total Asset Turnover
2.3
2.2
2.08
2.2...

...Week1 Assignment
Armando Samia
migosamia@yahoo.com
949 600 3240
Entrepreneurial Finance
January 13, 2013
1.[Financing Concepts] The following ventures are at different stages in their life cycles. Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.
A. Phil Young, founder...

...INSTRUCTIONS: |
1. Answer all questions.
2. Answer in ENGLISH.
3. Arithmetic calculators are allowed. (Cellular phones may not be used as calculators).
4. Only answers written in the answer booklet will be marked.
5. Dictionaries are not permitted.
Question 1
Listed below are multiple choice questions. Read the statements and select the most appropriate
Answer. Write the numbers 1.1 to 1.10 and then only the alphabet of your choice. Eg...