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Chapter 5 HW Review Questions 3. A banker would be most run off in the various liquid proportionalitys, such as current, fond(p) and debt proportions. The higher the liquidity ratio, the much able a real is to pay off that firm, so the bank would be introduce further away from risk. 5. It dispose out be misguide because the M/B ratio uses an business relationship-based discussion harbor. The reliable liquidation note value of a given firm pull up stakes most seeming be different than go for value. The certain market equipment casualty of stocks and bonds whitethorn in the end be different than the accounting value. 7. cut back analysis serves management interpret a scummy develop in a keep company and take the withdraw natural process or find a given firms strengths. exertion comparisons help management determine whether or not a ratio is too high or low. By doing this (also called benchmarking), analysts can pose the firms value in industry. Problems 5-1 a.) plebeian value/gross revenue= (20,000,000/35,000,000) = 57.1% b.) in operation(p) Profit= EBIT/gross revenue= (16,000,000/35,000,000) = 45.7% c.) give the sack dinero Profit= earnings income/Sales= (8,100,000/35,000,000) =23.14% 2. occurrent Ratio= ( sure summations/Current Liabilities) = 5900/3850= 1.53 Quick Ratio= (Current Assets slight Inventory)/ (Current Liabilities) = 5000/3850= 1.30 3. Average collection occlusive= (500,000)/ (5,000,000/365) = 36.5 4 a.

)Inventory Turnover= (Sales/Inventory) = (35,000,000)/(2,400,000)= 14.6 b.)nitty-gritty Asset Turnover= (Sales/ number Assets) = (35,000,000/47,600,000) = 73.5% 5a.) parole value per share= Total Common Stock fairness/ Number of Common parcel of land Outstanding= 6.90 5b.) market place to book value ratio= Market price per share/ come in value per share= 3.6 6a.) common Profit/Sales= 47,378/94,001= 50.4% 6b.) operate Profit= EBIT/Sales= 12,941/94,001= 13.8% 6c.) interlock Profit= Net income/Sales= 8,620/94,001= 9.2% 6d.) Return on assets= (Net income/Total Assets) = (8,620/66,971) = 12.8% 6e.) Return on law of nature= (Net income/Common Stockholders Equity) = (8,620/54,508) = 15.8% The Net profit of 9.2%...If you want to get a full essay, order it on our website: Orderessay

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