You have been asked to present to a group of investors, and you can only present two financial ratios to help persuade them to invest. The ratios of choice is Profit Margin and Return onequity.• Explain the ratios you chose.Why did you choose those ratios, and how will it help you convince the investors to invest?• There are limitations to ratio analysis. What is missing from the ratios you chose?

The objective of the question is to explain the significance of the chosen financial ratios - Profit…

Answered: You have been asked to present to a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which ratio(s) would you rely on as an investor? What about as a business manager? Please explain really well
Please provide type solution fast i will rate for sure
NOI is important because you calculate your:a. Tax liabilityb. Value and financingC. Both a & bd. None of the above NPV is a greata. Way to determine if it is the IRRb. Analytical toolC. Negotiating toold. Determine leverage. Real estate is a:a. Cash flow businessb. An easy entry businessc. Risk for profit businessd. All of the above Points increasea. The lenders yieldb. Bowers cost of financingC. Both A & Bd. Monthly payments
Using common-size balance sheet percentages to project individual assets, liabilities, or shareholders' equity has all of the following shortcomings except: a. Individual assets, liabilities, and shareholders' equity are independent of each other. b. The common-size percentages do not permit the analyst to easily change the assumptions about the future behavior of an individual asset or liability. c. Individual assets, liabilities, and shareholders' equity are not independent of each other. d. If a company experiences changing proportions for investments in securities among its assets, other asset categories may show decreasing percentages in some years even though their dollar amounts are increasing.
Suppose you, a stock analyst, are performing a ratio analysis and comparing a discount merchandiser with a high-end merchandiser. Suppose further that both companies have identical ROEs. If you apply the DuPont equation to both firms, would you expect the three components to be the same for both companies? If not, explain what balance sheet and income statement items might lead to the differences in the DuPont equation components.
1- What are the consequences of poor internal equity? 2- What are the consequences of poor external equity? 3- How can pay grades help prevent internal equity problems?
An example of asymmetric information in financial markets is that A. the borrower knows more than the lender. B. the lender knows more than the borrower. C. the borrower has a long-term goal while the lender has a short- term goal. D. the borrower and lender have different expectations about financial markets.
To what extent would market timing be an effective strategy for a financial manager regarding high-income investors? Retirees? Please explain and ensure to add references and citations.
Which of the following ratios is not considered to be a test of profitability? Group of answer choices A)Current ratio. B)Net profit margin. C)Return on assets. D)Earnings per share. e)None of the above
The primary goal of financial management is Select one: a. Increasing the owners wealth b. Reducing risk c. None of these d. Increasing profit
Most decisions made by management impact the ratios analysts use to evaluate performance. Indicate (by letter) whether each of the actions listed below will immediately increase (I), decrease (D), or have no effect (N) on the ratios shown. Assume each ratio is less than 1.0 before the action is taken. CAn you explain how to solve these not just the answers? 1. Issuance of long-term bonds 2. Issuance of short-term notes 3. Payment of accounts payable 4. Purchase of inventory on account 5. Purchase of inventory for cash 6. Purchase of equipment with a 4-year note 7. Retirement bonds 8. Sale of common stock 9. Write-off of obsolete inventory 10. Purchase of short-term investment for cash 11. Decision to refinance on a long-term basis some currently maturing debt
Suppose you a stock analyst are performing a ratio analysis and comparing a discount merchdiser with a high end merchandiser. Suppose further that both companies have identical ROE. IF You apply the dupont equation to both firms, would you expect the three components to be the same for both companies? If not, explain what balance balance sheet and income statements might lead to the differences in the Dupont equation components.

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