Comment on whether or not if the ratios are favourable or unfavourableReturn on Capital Employed 20162017201820192020BHP10.19%12.03%17.24%19.63%17.65%RIO9.63%15.36%15.96%20.46%20.43%FMG11.34%20.40%11.28%28.28%33.55%

ROCE is a long term profitability ratio. ROCE shows how effectively assets of a company is utilized…

Answered: Comment on whether or not if the ratios…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

explain the image provided give recommendation
What does this say about the company?
EXPLAIN THE RESULT OF EACH ITEMS
What is the comparison (analysis) of the Times Interest Earned (TIE) of Industry Average Ratio and the Company A Ratio? The Times Interest Earned (TIE) has decreased and increased. Why? Industry Average Times Interest Earned 2015: 8.63 2016: 42.10 2017: 15.41 2018: -0.07 2019: 0.27 Company A Times Interest Earned 2015: 5.53 2016: 3.80 2017: 5.78 2018: 5.07 2019: 4.58
IV. Conclusion: Based on your findings on ratio analysis and interpretation, what conclusion can you make? V. Recommendations: - What recommendations can you give to the company with regards to your findings? - What recommendations can you give to the investor with regards to your findings?
Add a comment for this solution in table.
Question 6 (this question has 2 parts) Gordon Industries Ltd has provided you with the following information: 2019 2020 2021 Debt to Equity 10.5% 23.4% 36.2% Gross Profit margin 30.2% 36.5% 35.3% Net profit margin 19.5% 17.6% 13% Return on Equity 15.1% 17.5% 16.2% Asset Turnover (times) 0.71 0.82 1.41 Return on Assets 13.8% 14.4% 18.3% Interest coverage ratio 4 times 3 times 2.5 times a) Advise Gordon Industries of the relationship between Return on Assets, Asset Turnover and Net Profit Margin. Comment on the profitability position of Gordon and any advice you consider relevant. b) Advise the shareholders of Gordon Industries on the financial structure of the company.
Using the findings, provide a brief summary about the financial status of each of the companies and provide a recommendation for the investment choice.
What can I recommend to this company to increase its liquidity position?
Question Four Wakanda Mulla has presented the following financial data for 2017 : Balance Sheet 2016 Non-Current Assets Goodwill Tangible Assets Long term Investment Current Assets Closing Stock Debtors Short term Investment Bank Cash Total Assets Capital & Reserves Share Capital General Reserves Retained Profit Non Current Liability 10% Debenture Current Liabilities Creditors Dividends Payable Tax Payable Interest Owing Bank Overdraft Total Equity & Liabilities Condensed Income Statement PBIT Less interest Profit before tax Less tax PAT Add Retained Earning bid Total Profit for the Year Cost Less Transfer to Reserves Less Dividends Retained Earning e/d 1,800,000 Depn (360.000) 35,000 65,000 40,000 0 2,000 36,000 11000 20,000 10.000 35.000 700,000 250,000 210,000 1,160,000 Page 8 of 12 NBV 0 0 260.000 1.440.000 130,000 1,830,000 142.000 1,972,000 700,000 112,000 1,972,000 (60,000) (100,000) (160.000) 0 (160,000) 210,000 50,000 0 50,000 2017 Cost Depn 2.300,000 (450,000) 55,000 20,000…

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*Return on Capital Employed*
	2016	2017	2018	2019	2020
BHP	10.19%	12.03%	17.24%	19.63%	17.65%
RIO	9.63%	15.36%	15.96%	20.46%	20.43%
FMG	11.34%	20.40%	11.28%	28.28%	33.55%

Comment on whether or not if the ratios are favourable or unfavourable Return on Capital Employed 2016 2017 2018 2019 2020 BHP 10.19% 12.03% 17.24% 19.63% 17.65% RIO 9.63% 15.36% 15.96% 20.46% 20.43% FMG 11.34% 20.40% 11.28% 28.28% 33.55%