Homework Answers
True
Explanation
Market value ratio is a relation of how much market price the investors place as a ratio of book value per share. More market price is placed against the book value of a share when (1) investors are convinced with past performance and (2) Investors had good hope in future of the entity.
So the statement is true in saying that investors looks at both future and past as well in understanding the market value ratio.
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Market value ratios provide management with an indication of how investors view the firm's past performance...
True/False (True=A, False-B) 1. Market value ratios provide management with an indication of how investors view...
True/False (True=A, False-B) 1. Market value ratios provide management with an indication of how investors view the firm's past performance and especially its future prospects. T 2. An odd lot is defined as purchase or sale of less than 100 shares of a stock. 3. A bid is an asking (selling) price of a specialist or a market maker. 4. A Mutual Fund is an example of a buy side firm. 5. Commercial banks are depository institutions. 6. Financial institutions...
Market value ratios relate the firm’s stock price to its earnings, cash flow, and book value...
Market value ratios relate the firm’s stock price to its earnings, cash flow, and book value per share, and thus give management an indication of what investors think of the company’s past performance and future prospects. If the liquidity, asset management, debt management, and profitability ratios all look good, then the market value ratios will be high, and the stock price will probably be as high as can be expected. Identify three market value ratios and explain what they mean...
Ratio Analysis
Most decision makers and analysts use five groups of ratios to examine the different aspects of a company’s performance. Indicate whether each of the following statements regarding financial ratios is true or false.StatementTrueFalseA company exhibiting a high liquidity ratio is likely to have enough resources to pay off its short-term obligations.Asset management or activity ratios provide insights into management’s efficiency in using a firm’s working capital and long-term assets.Debt or financial leverage ratios help analysts...
13. Ratio analysis A company reports accounting data in its financial statements. This data is used...
13. Ratio analysis A company reports accounting data in its financial statements. This data is used for financial analyses that provide insights into a company's strengths, weaknesses, performance in specific areas, and trends in performance. These analyses are often used to compare a company's performance to that of its competitors, or to its past or expected future performance. Such insight helps managers and analysts improve their decision making. Consider the following scenario: You work as an analyst at a credit-rating...
Accounting reports merely provide a record of past transactions and do not reflect management estimates and...
Accounting reports merely provide a record of past transactions and do not reflect management estimates and forecasts of the future. True False
6. Market value ratios Ratios are mostly calculated using data drawn from the financial statements of...
6. Market value ratios Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial statements. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $95,000,000 and a current stock price...
6. Market value ratios Aa Aa Ratios are mostly calculated using data drawn from the financial...
6. Market value ratios Aa Aa Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market-based ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial statements. Consider the case of Green Caterpillar Garden Supplies Inc. Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $8,500,000, and a current stock...
QUESTION 5 An estimate of a stock's "true" value based on accurate risk and return is...
QUESTION 5 An estimate of a stock's "true" value based on accurate risk and return is known as the company's market price. True False 2.5 points QUESTION 6 The verbal section of a company's annual report discusses the company's past year's performance and future prospects. True False 2.5 points QUESTION 7 Income Statement gives a "snapshot" of a company's assets and who has claims on them on a given date. True False 2.5 points QUESTION 8 Stockholders'...
7. The relationship between the book value of shareholders' equity and the firm's Market Value Added...
7. The relationship between the book value of shareholders' equity and the firm's Market Value Added (MVA) and Economic Value Added (EVA) Yesterday, Extensive Enterprise Inc. released its 2015 annual report on the company's website. While reading the report for her boss, Jia came across several terms about which she was unsure. She leaned around the wall of her cubicle and asked her colleague, Ryker, for help. Aa Aa ia Ryker, do you have a second to help me with...
Market value ratios Ratios are mostly calculated using data drawn from the financial statements of a...
Market value ratios Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm’s observable market value, stock prices, and book values, integrating information from both the market and the firm’s financial statements. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $8,000,000 and a current stock price of...
True/False (True=A, False-B) 1. Market value ratios provide management with an indication of how investors view the firm's past performance and especially its future prospects. T 2. An odd lot is defined as purchase or sale of less than 100 shares of a stock. 3. A bid is an asking (selling) price of a specialist or a market maker. 4. A Mutual Fund is an example of a buy side firm. 5. Commercial banks are depository institutions. 6. Financial institutions...
13. Ratio analysis A company reports accounting data in its financial statements. This data is used for financial analyses that provide insights into a company's strengths, weaknesses, performance in specific areas, and trends in performance. These analyses are often used to compare a company's performance to that of its competitors, or to its past or expected future performance. Such insight helps managers and analysts improve their decision making. Consider the following scenario: You work as an analyst at a credit-rating...
6. Market value ratios Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial statements. Consider the case of Green Caterpillar Garden Supplies Inc.: Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $95,000,000 and a current stock price...
6. Market value ratios Aa Aa Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market-based ratios, relate to a firm's observable market value, stock prices, and book values, integrating information from both the market and the firm's financial statements. Consider the case of Green Caterpillar Garden Supplies Inc. Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $8,500,000, and a current stock...
7. The relationship between the book value of shareholders' equity and the firm's Market Value Added (MVA) and Economic Value Added (EVA) Yesterday, Extensive Enterprise Inc. released its 2015 annual report on the company's website. While reading the report for her boss, Jia came across several terms about which she was unsure. She leaned around the wall of her cubicle and asked her colleague, Ryker, for help. Aa Aa ia Ryker, do you have a second to help me with...
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