% sales and increased interest expense for additional debt requirements, the net earnings for 2002 and 2003 in comparison to other years have increased. It shows that though sales are increasing at a substantial rate, increase in interest payment slows the growth of Net Earnings.
example, means the company has a net income of $0.20 for each dollar of sales.
Net profit margin is what percentage of sales is profit after tax. Higher it is better it is . in beginning it was low because of slow growth and under utilisation of factor. Afterward it rise because of rapid...
the firm's owner believes she could delay payment to 40 days without adverse effects. What would be the effective annualpercentage cost of funds raised by this action? (Assume a 365-day year.)
Discount % 1% Net days 20
Discount days 10 Actual days to payment 40
EAR = [1 + Disc. %/(100 – Disc. %)][365/(Actual days – Disc. Period)] – 1 = 13.01%...
applied to current earnings to determine the value of a share of the stock in the market. The price-earnings ratio is influenced by the earnings and salesgrowth of the company, the risk (or volatility in performance), the debt-equity structure of the company, the dividend policy, the quality of...
balance sht and income statement to break the ROA & ROE ratios into component
DuPont sys of analysis
Common-size ﬁnanical statements:
dividing all BS amts by total Assets & all IS amt by netsales
Internal growth rate is the:
growth rate a ﬁrm can sustain if it ﬁnances growth using only...
per share Attractiveness of firm on equity markets
SalesAnnualpercentagegrowth in totalsales Firm's growth rate in salesNet Income Annualpercentagegrowth in profits Firm's growth rate in profits
Earnings Per Share Annualpercentagegrowth in EPS Firm's growth rate in EPS...
. cost C S Answer: a MEDIUM
92. A firm buys on terms of 3/15, net 45. It does not take the discount,
and it generally pays after 60 days. What is the nominal annualpercentage cost of its non-free trade credit, based on a 365-day year?
determine the rate of return on assets in each of the two years for the Castillo Products.
Rate of return on assets 2009: -7.22% x .900 = -6.50%
Rate of return on assets 2010: 5.00% x 1.250 = 6.25%
C. Calculate the percentagegrowth in netsales from 2009 to 2010...
understatement of revenues), profit margins (net income/sales) will be smaller (understated).
Debt to equity ratio -- Overstatement of liabilities and understatement of retained earnings results in an inflated debt-to-equity ratio (total liabilities/total stockholders’ equity).
company. This is a very important part of the company financial information and can be useful to investors, creditors, and management to make informed decisions and strategies.
RETURN ON ASSETS
Net Profit After Taxes
percentage and calculated as:
Return on Equity = Net Income/Shareholder's Equity
Starbucks Corporation annual reports from 2008 and 2009 were used to determine the ROE ratio as follows:
|Starbucks Corporation totalnet income for 2008 (in millions) = $459.5...
approximately 20% in fiscal 2007, consistent with its three to five year revenue growth target. Operating income as a percentage of totalnet revenues decreased to 11.5% in fiscal 2006 from 12.3% in fiscal 2005, due to the recognition of stock-based compensation. Net earnings increased by 14% in fiscal...
units). Warehouse expenses as a percent of net revenues. This ratio is calculated by dividing total warehouse expenses by netsales revenues. Netsales revenues represent the dollars received from both branded and private-label footwear sales after exchange rate adjustments. A low percentage of...
debt, internal cash generation, or equity. The ratio can also be used to determine if too much equity has accumulated in a business, so that some may be extracted through extra dividends, a stock buyback, or some other form of distribution.
Formula: Divide annualnetsales by total equity. It is...
8). From the most recent published annual report, Wal-Mart generates annualsales of approximately $444 billion and employs 2.2 million associates worldwide during the fiscal year 2012. According to Wal-Mart, its global mission is to save people money so they can live better, which was also the...
reflect the industry composite averages. Therefore, using a Cost of Sales equal to 77.1% of NetSales, we were able to determine Gross Profit. We considered the possibility that this percentage may not accurately reflect that of a beer-only distributor (and could assume that such a distributor would...
of sales. Operating efficiency increased, reducing the funding costs of growth. To determine the actual effect operating efficiency had on costs we multiply the 2.6% decrease by the sales of that year ($5,296 million * 2.6%) giving Dell $138 million in cost savings. This reduces our estimate of total...