FINANCIAL RATIOS Financial ratios are indicators of a company’s performance as discernable from the company’s Balance Sheet and income Statement. We will discuss some of the simple ratios of a company and talk about their significance. Liquidity Ratios: Show the company’s ability to pay of its current liabilities from its current assets. 1. Current Ratio Current assets should be significantly higher than current liabilities so that the current ratio is higher than 2:1. 2. Quick Ratio
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FINANCIAL STATEMENTS Accrual-based approach – revenues are recorded at the point of sale and costs when they are incurred‚ not necessarily when a firm receives or pays out cash Cash flow approach – used by financial professionals to focus attention on current and prospective inflows and outflows of cash 1. Balance sheet a. Assets Cash and Cash Equivalents Marketable securities Accounts receivable Inventories Net property‚ plant and equipment Intangible assets b. Liabilities Accounts
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Making a sound financial decision is a vital component of the success of a business. The business must conduct market research‚ description of products‚ services and marketing strategies‚ and setting principles for the business’s success. Expenses should be noted prior to writing a financial plan. The goal of a business is to operate on a predefined budget. Ensure there are no undefined or hidden cost that could cause problems later. The business plan helps the business to make day-to-day decisions
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1. Current Ratio- the current ratio is current assets divided by current liabilities. In the data from 2002 in Appendix D the current assets equal $104‚296.00 and the current liabilities equal $139‚017.00 the current ratio equals 0.75. 2. Long –term solvency ratio- the formula used for long term solvency is total assets divided by total liabilities. In the data provided the total assets equal $391‚270.00 and the total liabilities equal $310‚246.00 making the long-term solvency ratio equal 1.26
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FIN 571 Week 4 Quiz. 100%. UOP‚ 2014. NEW. Grade A. There are 9 questions total Note: The questions might be in a different order. Please use the find feature in word to locate your questions faster. For customized tutorial service or if you have any questions/concerns‚ please contact me at tutoruop@gmail.com. Thank you :) Please purchase to see answers. Thank you Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must he invest today such that he
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FIN 571 FINAL EXAM 3 http://www.finalexamguideline.com/FIN-571-FINAL-EXAM-3-53.htm 1) Whenever a firm splits itself into separate units‚ with each unit having limited liability with respect to its financing‚ the capital structure of each unit becomes __________ 2) An investor’s risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true? 3) An all-equity-financed firm would __________. 4) The capital budgeting process can be broken
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Guillermo Furniture Store Concepts FIN/571 October 31‚ 2011 Guillermo Furniture Store Concepts This assignment sets out to explain the pertinent financial concepts and principles found in chapters two and three of the text Corporate Financial Management by (Emery‚ Finnerty‚ & Stowe‚ 2007) and how they relate to the context of the Guillermo’s Furniture Store scenario. Guillermo’s was a leading furniture
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Business Structure Advice FIN/571 December 12‚ 2013 Business Structure Advice From: Beverly Mahone Sent: December 2‚ 2012 To: John Owner CC: Subject: Advice in starting your business John‚ when starting a business one has several options in the type of business structure to use. The different types of business structures are the sole proprietorship structure‚ the partnership structure‚ the corporation structure‚ the S corporation structure‚ and the limited liability company
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FINANCIAL RATIO ANALYSIS Based on the table 1‚ it shows that the financial ratio was divided into four parts which are liquidity‚ assets management‚ long-term debt paying ability and profitability. Liquidity ratios are particularly interesting to short-term creditors and it is focus on current assets and current liability. In addition‚ General Thumb of rule for the current ratio should be at least 2:1. For the Gemini Electronic the current ratio is consistent and it is increase in year 2006. But
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Part A After-TAX Cost Debt O’Grandy Apparel Company can calculate the after tax debt cost using YTM (CP + (FV-Nd /n) / FV +Nd /2) *2. Cp is (0.12/2) * 1000= 60 Semi-annually Fv is 1000 Nd is 995 – (0.025* 1000) = 970 N is 20*2 because it is semi-annually then you have to use Kdt= Kd+ (i-T) .The tax bracket is 40 percent. Now we can have the after tax debt when it is equal or smaller than $700000 Kd ( 1-T) = 0.1249 (1-0.4)= 0.07494. If it is more than $700000 it will be KD (1-t) = 0.18(1-0.4)
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