Financial analysis comparison example video
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Subject
Finance
Date
May 20, 2024
Type
xlsx
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3
Uploaded by PrivateLyrebirdPerson1083
Ratios example
Industry
EVA
Company
Average
ROIC %
14.4%
12.0%
WACC%
9.0%
9.0%
EVA spread %
5.4%
3.0%
$EVA
$300M
$500M
Adjusted Dupont Model
Return on Common Equity %
21.5%
22.4%
ROIC %
14.4%
12.0%
Debt-to-Equity 1.5x 2.2x Net Operating Margin %
12%
12%
Capital Turnover
1.2x 1.0x Margins
Gross margin
33%
35%
EBITDA margin%
20%
20%
Net Operating Margin %
12%
12%
Net Profit Margin %
8.0%
7.0%
Turnovers
Capital turnover
1.2x 1.00x NOWC turnover
4.0x 4.5x Days Sales Outstanding (AR Days)
30 35 Inventory days
60 65 Accounts Payable days
30 45 Cash cycle
60 55 Net PP&E Turnover
1.7x 1.3x Solvency
Debt-to-EBITDA
1.7x
2.5x
Debt-to-Equity
1.5x
2.2x
Interest Coverage (Times Interest Earned)
2.5x
1.7x
Fixed Charge Coverage (The Mother!)
1.5x
1.2x
Liquidity:
Current Ratio
1.7x
1.4x
Quick Ratio
0.8x
0.5x
EVA (We can't compare dollars across companies due to size differences. Here the Industry companies are lar
=
X Please distinguish mulitples from percentages, I am uptight about that one:) Solvency and Liquidity Risks
rger. Use the EVA spread)
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Debt Ratio
Equity Ratio
EPS
DPS
Stock Price
30%
70%
1.55
0.34
22.35
40%
60%
1.67
0.45
24.56
50%
50%
1.72
0.51
25.78
60%
40%
1.78
0.57
27.75
70%
30%
1.84
0.62
26.42
Which capital structure shown in the preceding table is Universal Exports Inc.’s optimal capital structure?
Globex Corp. has a capital structure that consists of 40% debt and 60% equity. The firm’s current beta is 1.10, but management wants to understand Globex Corp.’s market risk without the effect of leverage.
If Globex Corp. has a 25% tax rate, what is its unlevered beta?
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Cost of Debt
After-tax cost of debt
4.90%
Cost of Equity
Treasury Bond Rate (risk free rate)
5%
Beta
0.48
Risk premium
7%
Years
2014
2015
2016
2017
Capital Structure
Debt
22%
25%
28%
27%
Equity
78%
76%
72%
73%
Please calculate following for each of the year from 2014 to 2017:3
1. Cost of Debt (before tax)
2. Cost of Equity
3. WACC (Weighted Average Cost of Capital)
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Company Name
Total Debt Ratio
Levered Equity Beta
Marginal Tax Rate
Revenues ($ Mill)
Priv-Held Automotive
65.00%
?
40.00%
Ford Motor Company
85.98%
1.07
7.59%
157,978
Fiat Chrysler America
74.29%
2.18
11.95%
108,018
General Motors
81.18%
1.42
3.47%
144,010
1. Calculate the unlevered asset betas for each of the three comparable firms being sure to adjust appropriately for their respective marginal tax rates
2. Calculate the arithmetic industry average of the three asset betas
3. Calculate the weighted average asset beta using the revenues to determine the weights
4. Estimate a levered equity beta for the Privately-Held Automotive division for both the arithmetic and the weighted averages.
5. Write out the algebraic equation of the variance (s2) of a portfolio with three assets, A, B and C.
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Debt equity ratio? General accounting
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Financial Accounting
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Accounting question
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Analyze the following ratios (Good/Not good, Undervalued/Overvalued, or just OK) based on the given industry averages.
Ratios
Annual Data
Industry Average
Interpretation
Current
5.7
4
Days Sales Outstanding
37 days
42 days
Total Debt to Total Capital
47.80%
32.60%
Times-Interest Earned
2.2
6
Profit Margin
6.10%
6.00%
Return on Invested Capital
10.03%
10.00%
Enterprise Value to EBITDA
0.87
1.12
Provide a decision for each analysis.
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F1
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General accounting solve this question
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Provide correct answer the accounting question
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Question 1. WACC
Cost of Debt
After-tax cost of debt
4.90%
Cost of Equity
Treasury Bond Rate (risk free rate)
5%
Beta
0.48
Risk premium
7%
Years
2014
2015
2016
2017
Capital Structure
Debt
22%
25%
28%
27%
Equity
78%
75%
72%
73%
Please calculate following for each of the year from 2014 to 2017
Cost of Debt (before tax)
Cost of Equity
WACC (Weighted Average Cost of Capital)
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Financial Accounting Question please solve
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Check my work
Evans Technology has the following capital structure.
Debt
Common equity
25%
75
The aftertax cost of debt is 7.00 percent, and the cost of common equity (in the form of retained earnings) is 14.00 percent.
a. What is the firm's weighted average cost of capital? (Do not round intermediate calculations. Input your answers as a percent
rounded to 2 decimal places.)
Weighted Cost
Debt
Common equity
Weighted average cost of capital
0.00 %
An outside consultant has suggested that because debt is cheaper than equity, the firm should switch to a capital structure that is 50
percent debt and 50 percent equity.
EGO
152
APA
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Xena Corp.
Total Assets
$21,249
Interest-Bearing Debt (market value)
$11,070
Average borrowing rate for debt
10.20%
Common Equity:
Book Value
$5,535
Market Value
$23,247
Marginal Income Tax Rate
19%
Market Beta
1.64
Using the information from the table, and assuming that the risk-free rate is 4.5% and the market risk premium is 6.2%, calculate Xena's weighted-average cost of capital:
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Want to this question answer general Accounting
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SUBJECT FINANCIAL ACCOUNTING
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1. Is leverage better or worse in the period from 2015-2021? Why?
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Related Questions
- Debt Ratio Equity Ratio EPS DPS Stock Price 30% 70% 1.55 0.34 22.35 40% 60% 1.67 0.45 24.56 50% 50% 1.72 0.51 25.78 60% 40% 1.78 0.57 27.75 70% 30% 1.84 0.62 26.42 Which capital structure shown in the preceding table is Universal Exports Inc.’s optimal capital structure? Globex Corp. has a capital structure that consists of 40% debt and 60% equity. The firm’s current beta is 1.10, but management wants to understand Globex Corp.’s market risk without the effect of leverage. If Globex Corp. has a 25% tax rate, what is its unlevered beta?arrow_forwardCost of Debt After-tax cost of debt 4.90% Cost of Equity Treasury Bond Rate (risk free rate) 5% Beta 0.48 Risk premium 7% Years 2014 2015 2016 2017 Capital Structure Debt 22% 25% 28% 27% Equity 78% 76% 72% 73% Please calculate following for each of the year from 2014 to 2017:3 1. Cost of Debt (before tax) 2. Cost of Equity 3. WACC (Weighted Average Cost of Capital)arrow_forwardNeed help pleasearrow_forward
- Company Name Total Debt Ratio Levered Equity Beta Marginal Tax Rate Revenues ($ Mill) Priv-Held Automotive 65.00% ? 40.00% Ford Motor Company 85.98% 1.07 7.59% 157,978 Fiat Chrysler America 74.29% 2.18 11.95% 108,018 General Motors 81.18% 1.42 3.47% 144,010 1. Calculate the unlevered asset betas for each of the three comparable firms being sure to adjust appropriately for their respective marginal tax rates 2. Calculate the arithmetic industry average of the three asset betas 3. Calculate the weighted average asset beta using the revenues to determine the weights 4. Estimate a levered equity beta for the Privately-Held Automotive division for both the arithmetic and the weighted averages. 5. Write out the algebraic equation of the variance (s2) of a portfolio with three assets, A, B and C.arrow_forwardNeed helparrow_forwardDebt equity ratio? General accountingarrow_forward
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