The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time. Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements. Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

Question

RATIO ANALYSIS The Corrigan Corporation’s 2017 and 2018 financial statements follow,along with some industry average ratios.a. Assess Corrigan’s liquidity position, and determine how it compares with peers andhow the liquidity position has changed over time.b. Assess Corrigan’s asset management position, and determine how it compares withpeers and how its asset management efficiency has changed over time.c. Assess Corrigan’s debt management position, and determine how it compares withpeers and how its debt management has changed over time.d. Assess Corrigan’s profitability ratios, and determine how they compare with peersand how its profitability position has changed over time.e. Assess Corrigan’s market value ratios, and determine how its valuation compares withpeers and how it has changed over time. Assume the firm’s debt is priced at par, sothe market value of its debt equals its book value. f. Calculate Corrigan’s ROE as well as the industry average ROE, using the DuPontequation.…

Answer 1

Question

Chapter 4, Problem 25SP

a.

Summary Introduction

To determine: The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time.

Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements.

Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

b.

Summary Introduction

To determine: The Assets management position of C Corporation, comparison of assets management position with peers and the changes in assets management position over the time.

Assets Management Position: The assets management position of the company is indicated by assets management ratios which give idea how well the company is using its assets.

c.

Summary Introduction

To determine: The debt management position of C Corporation, comparison of debt management position with peers and the changes in debt management position over the time.

Debt Management Position: Debt management position is indicated by the debt management ratios which give an idea how the company finances its assets as well as the capability to pay back its long-term debt.

d.

Summary Introduction

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

e.

Summary Introduction

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

f.

Summary Introduction

To calculate: The ROE of the C company as well industry average ROE using DuPont equation and way of comparing of Company’s financial position with industry’s average numbers.

Return on Equity (ROE): Return on equity is the return from the equity. It is the ratio of net income and shareholders’ equity. This ratio measures the performance of the company and tells how well the company is performing. This ratio is used to compare own firm with competitors.

Du Pont Equation: Among all ratios, return on equity is very common. It shows the value of the firm. Improvement in the ROE is considered as valued addition to the firm. ROE can be linked with other ratios. Analysis of such ratios will indicate proper reason for change in ROE. The combination is known as Du Pont equation which is shown below:

g.

Summary Introduction

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

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RATIO ANALYSIS The Corrigan Corporation’s 2017 and 2018 financial statements follow,along with some industry average ratios.a. Assess Corrigan’s liquidity position, and determine how it compares with peers andhow the liquidity position has changed over time.b. Assess Corrigan’s asset management position, and determine how it compares withpeers and how its asset management efficiency has changed over time.c. Assess Corrigan’s debt management position, and determine how it compares withpeers and how its debt management has changed over time.d. Assess Corrigan’s profitability ratios, and determine how they compare with peersand how its profitability position has changed over time.e. Assess Corrigan’s market value ratios, and determine how its valuation compares withpeers and how it has changed over time. Assume the firm’s debt is priced at par, sothe market value of its debt equals its book value. f. Calculate Corrigan’s ROE as well as the industry average ROE, using the DuPontequation.…

May I ask for an explanation and solution to the question for a better understanding. Thank you! 12. What is Sculler's current ratio at December 31, 2021? a. 2.220 to 1 b. 2.286 to 1 c. 3.250 to 1 d. 3.420 to 1

REQUIRED Use the information provided in below to answer the following questions for the financial year ended 31 December 2023. Note: Answers to the ratios must be expressed to two decimal places. Comment on the management of debtors and creditors after calculating the relevant ratios. Determine the percentage of the profit after tax that has been retained by the company. Calculate the return on capital employed and comment on your answer. Would prospective lenders be concerned about the relative proportion of borrowed capital and own capital? Motivate your answer by calculating the relevant ratio. Calculate the ratio that measures the efficiency with which the non-current and current assets of company were managed. Comment on the ability of the company to settle its short-term debts under distress conditions. Use a relevant ratio to motivate your answer. INFORMATION The following information was obtained from the financial records of Fiona Limited:

Answer 2

Question

Chapter 4, Problem 25SP

a.

Summary Introduction

To determine: The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time.

Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements.

Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

b.

Summary Introduction

To determine: The Assets management position of C Corporation, comparison of assets management position with peers and the changes in assets management position over the time.

Assets Management Position: The assets management position of the company is indicated by assets management ratios which give idea how well the company is using its assets.

c.

Summary Introduction

To determine: The debt management position of C Corporation, comparison of debt management position with peers and the changes in debt management position over the time.

Debt Management Position: Debt management position is indicated by the debt management ratios which give an idea how the company finances its assets as well as the capability to pay back its long-term debt.

d.

Summary Introduction

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

e.

Summary Introduction

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

f.

Summary Introduction

To calculate: The ROE of the C company as well industry average ROE using DuPont equation and way of comparing of Company’s financial position with industry’s average numbers.

Return on Equity (ROE): Return on equity is the return from the equity. It is the ratio of net income and shareholders’ equity. This ratio measures the performance of the company and tells how well the company is performing. This ratio is used to compare own firm with competitors.

Du Pont Equation: Among all ratios, return on equity is very common. It shows the value of the firm. Improvement in the ROE is considered as valued addition to the firm. ROE can be linked with other ratios. Analysis of such ratios will indicate proper reason for change in ROE. The combination is known as Du Pont equation which is shown below:

g.

Summary Introduction

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

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Answer 3

Question

Chapter 4, Problem 25SP

a.

Summary Introduction

To determine: The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time.

Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements.

Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

b.

Summary Introduction

To determine: The Assets management position of C Corporation, comparison of assets management position with peers and the changes in assets management position over the time.

Assets Management Position: The assets management position of the company is indicated by assets management ratios which give idea how well the company is using its assets.

c.

Summary Introduction

To determine: The debt management position of C Corporation, comparison of debt management position with peers and the changes in debt management position over the time.

Debt Management Position: Debt management position is indicated by the debt management ratios which give an idea how the company finances its assets as well as the capability to pay back its long-term debt.

d.

Summary Introduction

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

e.

Summary Introduction

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

f.

Summary Introduction

To calculate: The ROE of the C company as well industry average ROE using DuPont equation and way of comparing of Company’s financial position with industry’s average numbers.

Return on Equity (ROE): Return on equity is the return from the equity. It is the ratio of net income and shareholders’ equity. This ratio measures the performance of the company and tells how well the company is performing. This ratio is used to compare own firm with competitors.

Du Pont Equation: Among all ratios, return on equity is very common. It shows the value of the firm. Improvement in the ROE is considered as valued addition to the firm. ROE can be linked with other ratios. Analysis of such ratios will indicate proper reason for change in ROE. The combination is known as Du Pont equation which is shown below:

g.

Summary Introduction

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

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Answer 4

Question

Chapter 4, Problem 25SP

a.

Summary Introduction

To determine: The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time.

Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements.

Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

b.

Summary Introduction

To determine: The Assets management position of C Corporation, comparison of assets management position with peers and the changes in assets management position over the time.

Assets Management Position: The assets management position of the company is indicated by assets management ratios which give idea how well the company is using its assets.

c.

Summary Introduction

To determine: The debt management position of C Corporation, comparison of debt management position with peers and the changes in debt management position over the time.

Debt Management Position: Debt management position is indicated by the debt management ratios which give an idea how the company finances its assets as well as the capability to pay back its long-term debt.

d.

Summary Introduction

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

e.

Summary Introduction

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

f.

Summary Introduction

To calculate: The ROE of the C company as well industry average ROE using DuPont equation and way of comparing of Company’s financial position with industry’s average numbers.

Return on Equity (ROE): Return on equity is the return from the equity. It is the ratio of net income and shareholders’ equity. This ratio measures the performance of the company and tells how well the company is performing. This ratio is used to compare own firm with competitors.

Du Pont Equation: Among all ratios, return on equity is very common. It shows the value of the firm. Improvement in the ROE is considered as valued addition to the firm. ROE can be linked with other ratios. Analysis of such ratios will indicate proper reason for change in ROE. The combination is known as Du Pont equation which is shown below:

g.

Summary Introduction

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

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Answer 5

Chapter 4, Problem 25SP

a.

Summary Introduction

To determine: The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time.

Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements.

Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

b.

Summary Introduction

To determine: The Assets management position of C Corporation, comparison of assets management position with peers and the changes in assets management position over the time.

Assets Management Position: The assets management position of the company is indicated by assets management ratios which give idea how well the company is using its assets.

c.

Summary Introduction

To determine: The debt management position of C Corporation, comparison of debt management position with peers and the changes in debt management position over the time.

Debt Management Position: Debt management position is indicated by the debt management ratios which give an idea how the company finances its assets as well as the capability to pay back its long-term debt.

d.

Summary Introduction

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

e.

Summary Introduction

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

f.

Summary Introduction

To calculate: The ROE of the C company as well industry average ROE using DuPont equation and way of comparing of Company’s financial position with industry’s average numbers.

Return on Equity (ROE): Return on equity is the return from the equity. It is the ratio of net income and shareholders’ equity. This ratio measures the performance of the company and tells how well the company is performing. This ratio is used to compare own firm with competitors.

Du Pont Equation: Among all ratios, return on equity is very common. It shows the value of the firm. Improvement in the ROE is considered as valued addition to the firm. ROE can be linked with other ratios. Analysis of such ratios will indicate proper reason for change in ROE. The combination is known as Du Pont equation which is shown below:

g.

Summary Introduction

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

Answer 6

Chapter 4, Problem 25SP

a.

Summary Introduction

To determine: The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time.

Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements.

Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

Answer 7

Chapter 4, Problem 25SP

a.

Summary Introduction

To determine: The liquidity position of C Corporation, comparison of liquidity position with peers and the changes in liquidity position over the time.

Ratio Analysis: Ratio is used to compare two arithmetical figures. In case of the ratio analysis of the company, the financial ratios are calculated. The financial ratios examines the performance of the company and are used in comparing with other same business. It indicates relationship of two or more parts of financial statements.

Liquidity Position: The liquidity position of the company is indicated by liquidity ratios, which gives the idea of whether the company has the ability to pay back its liabilities, which has less than one year maturity.

Answer 8

b.

Summary Introduction

To determine: The Assets management position of C Corporation, comparison of assets management position with peers and the changes in assets management position over the time.

Assets Management Position: The assets management position of the company is indicated by assets management ratios which give idea how well the company is using its assets.

Answer 9

b.

Summary Introduction

To determine: The Assets management position of C Corporation, comparison of assets management position with peers and the changes in assets management position over the time.

Assets Management Position: The assets management position of the company is indicated by assets management ratios which give idea how well the company is using its assets.

Answer 10

c.

Summary Introduction

To determine: The debt management position of C Corporation, comparison of debt management position with peers and the changes in debt management position over the time.

Debt Management Position: Debt management position is indicated by the debt management ratios which give an idea how the company finances its assets as well as the capability to pay back its long-term debt.

Answer 11

c.

Summary Introduction

To determine: The debt management position of C Corporation, comparison of debt management position with peers and the changes in debt management position over the time.

Debt Management Position: Debt management position is indicated by the debt management ratios which give an idea how the company finances its assets as well as the capability to pay back its long-term debt.

Answer 12

d.

Summary Introduction

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

Answer 13

d.

Summary Introduction

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

Answer 14

e.

Summary Introduction

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

Answer 15

e.

Summary Introduction

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

Answer 16

f.

Summary Introduction

To calculate: The ROE of the C company as well industry average ROE using DuPont equation and way of comparing of Company’s financial position with industry’s average numbers.

Return on Equity (ROE): Return on equity is the return from the equity. It is the ratio of net income and shareholders’ equity. This ratio measures the performance of the company and tells how well the company is performing. This ratio is used to compare own firm with competitors.

Du Pont Equation: Among all ratios, return on equity is very common. It shows the value of the firm. Improvement in the ROE is considered as valued addition to the firm. ROE can be linked with other ratios. Analysis of such ratios will indicate proper reason for change in ROE. The combination is known as Du Pont equation which is shown below:

Answer 17

f.

Summary Introduction

To calculate: The ROE of the C company as well industry average ROE using DuPont equation and way of comparing of Company’s financial position with industry’s average numbers.

Return on Equity (ROE): Return on equity is the return from the equity. It is the ratio of net income and shareholders’ equity. This ratio measures the performance of the company and tells how well the company is performing. This ratio is used to compare own firm with competitors.

Du Pont Equation: Among all ratios, return on equity is very common. It shows the value of the firm. Improvement in the ROE is considered as valued addition to the firm. ROE can be linked with other ratios. Analysis of such ratios will indicate proper reason for change in ROE. The combination is known as Du Pont equation which is shown below:

Answer 18

g.

Summary Introduction

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

Answer 19

g.

Summary Introduction

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

Answer 20

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Ch. 4 - Financial ratio analysis is conducted by three...Ch. 4 - Prob. 2Q Ch. 4 - Over the past year, M.D. Ryngaert Co. had an...Ch. 4 - Profit margins and turnover ratios vary from one...Ch. 4 - How does inflation distort ratio analysis...Ch. 4 - If a firms ROE is low and management wants to...Ch. 4 - Give some examples that illustrate how (a)...Ch. 4 - Prob. 8Q Ch. 4 - Suppose you were comparing a discount merchandiser...Ch. 4 - Prob. 10Q

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time. Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time. Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.

To identify: The changes in the ratios, if the company has started cost-cutting measures, which allowed it to hold lower level of inventory and substantially deceased the cost of goods sold.

Chapter 4 Solutions

To determine: The profitability ratio of C Corporation, compare it with peers and the change in the profitability of the company over the time.

Profitability Ratios: These ratios give an idea whether the company is able to operate profitably and is efficient in using its assets.

To determine: The market value ratios, comparison of ratios with peers and changes in market values over the time.

Market Value Ratios: The market value ratios give idea about the view of investors towards the company and company’s future scenario.