Ratios Calculated Year 1 Year 2 5.20 Inventory turnover 10.40 Debt-to-equity 0.70 Price-to-cash-flow 3.64 8.32 0.56 Year 3 2.91 6.66 0.45 Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that apply. Cold Goose Metal Works Inc.'s ability to meet its debt obligations has improved since its debt-to-equity ratio decreased from 0.70 to 0.45 A decline in the inventory turnover ratio can be explained by the new Inventory management system that the company recently adopted, which led to more efficient inventory management. A decline in the debt-to-equity ratio implies a decline in the creditworthiness of the firm. A plausible reason why Cold Goose Metal Works Inc.'s price-to-cash-flow ratio has decreased is that investors expect lower cash flow per share in the future.
Ratios Calculated Year 1 Year 2 5.20 Inventory turnover 10.40 Debt-to-equity 0.70 Price-to-cash-flow 3.64 8.32 0.56 Year 3 2.91 6.66 0.45 Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that apply. Cold Goose Metal Works Inc.'s ability to meet its debt obligations has improved since its debt-to-equity ratio decreased from 0.70 to 0.45 A decline in the inventory turnover ratio can be explained by the new Inventory management system that the company recently adopted, which led to more efficient inventory management. A decline in the debt-to-equity ratio implies a decline in the creditworthiness of the firm. A plausible reason why Cold Goose Metal Works Inc.'s price-to-cash-flow ratio has decreased is that investors expect lower cash flow per share in the future.
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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Concept explainers
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:Ratios Calculated
Year 1 Year 2
3.64
+Q+
Price-to-cash-flow 5.20
Inventory turnover 10.40
Debt-to-equity
0.70
8.32
0.56
Year 3
2.91
6.66
0.45
Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis
report? Check all that apply.
Cold Goose Metal Works Inc.'s ability to meet its debt obligations has improved since its debt-to-equity ratio decreased from 0.70 to 0.45.
A decline in the inventory turnover ratio can be explained by the new Inventory management system that the company recently adopted,
which led to more efficient inventory management.
A decline in the debt-to-equity ratio implies a decline in the creditworthiness of the firm.
A plausible reason why Cold Goose Metal Works Inc.'s price-to-cash-flow ratio has decreased is that investors expect lower cash flow per
share in the future.
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