III. PROBLEMS. 1. Indicate whether the meaning and and consequences of the following statistical data / ratios which are considered symptoms of failure. Ratio High Low 1. Cash flow to total debt 2. Market Price 3. Working Capital to total asset 4. Retained earnings to total assets 5. EBIT to total assets 6. Market value of equity Book value or Debt 7. Sales to total assets

III. PROBLEMS. 1. Indicate whether the meaning and and consequences of the following statistical data / ratios which are considered symptoms of failure. Ratio High Low 1. Cash flow to total debt 2. Market Price 3. Working Capital to total asset 4. Retained earnings to total assets 5. EBIT to total assets 6. Market value of equity Book value or Debt 7. Sales to total assets

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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Which of the following ratios would a lender find most useful in monitoring a borrower's ability to make loan payments? () PE ratio Return on assets Total asset turnover Inventory turnover () Cash coverage ratio Previous Page Next Page Page 6
Which of the following is NOT a possible measure of debt capacity? Group of answer choices Debt Outstanding ratio Debt service ratio Debt outstanding per capita Operating ratio
Develop brief answers to each of the following questions: 1. Why does a decrease in receivable turnover create the need for cash from operating activities? 2. Why would ratiosthat include one balance sheet account and one income statement account, such as receivable turnover or return on assets, be qu estionable if they came from quarterly or other interim financial reports?
1. Which of the following is referred to as the Accounting Equation? Assets Liabilities + Equity Equity Liabilities + Assets Liabilities Assets + Equity Assets = Liabilities - Equity = 2. Which of the following make up the Finance Equation? (select all that apply) Revenues = Price x Volume Costs = Fixed + Variable Profit Revenues-Costs Income Sales - COGS
Which item is not correct with respect to the treatment of sustainable and transitory items and a company's income statement? Financial reporting assists statement users in forecasting future cash flows by providing an income statement format that segregates components of net income. Income statements prepared in accordance with GAAP differentiate between income components that are believed to be sustainable and those that are transitory. The income statement isolates a key figure called “income from sustainable operations.” Transitory items are disclosed separately on the income statement so that statement users can place less weight on these earnings components when forecasting future profitability.
Three common tools of financial analysis are: Multiple Choice O Financial reporting, sensitivity analysis, transactional analysis. Fair presentation, variance analysis, financial reporting. Horizontal analysis, vertical analysis, ratio analysis. Liquidation analysis, political analysis, fair value analysis. Relativity analysis, financial reporting, fair value analysis.
Whats the equation to find current ratio when current assets isnt given? Also how do you find debit to equity ratio in this kind of problem?
A. Which of the following is most closely associated with the cost of using assets? a. Asset utilization b. Sales revenue c. Proportion of debt and equity d. Average price B. Which of the following is most closely associated with the return on management’s use of assets? a. Cost of capital b. Mix of equity types c. Prime lending rate d. # of products sold
_______ ratios are used to measure the speed in which various assets are converted into sales or cash. A Debt (aka Leverage) B Efficiency (aka working capital) C Profitability C Coverage
How do excessive inventories affect the following financial statements; Income Statement, Balance Sheet, and Cash Flow Statement. Is it positive or negative, be specific.
Explain how the credit analyst's focus will differ from the investment analyst's focus. What do each of the following ratios measure? Liquidity ratios Activity ratios Leverage ratios Profitability ratios Market ratios Explain the difference between Horizontal and Vertical analysis.
Limitations of the balance sheet include the following, except Group of answer choices It is the basis for calculating many financial ratios Assets and liabilities are generally reported at historical cost Judgment and estimates are used in some cases The omission of items that have financial value

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