What is Current Ration, Leverage, and Inventory turnover in companies financial report?
What is Current Ration, Leverage, and Inventory turnover in companies financial report?
Homework Answers
1. Current Ratio tells about the short term liquidity of a company to pay off it's short term debts. It is a ratio of current assets to current liability . It shows that a company is liquid enough to fund it's short term repayment liability. The higher the current ratio , the better is for the firm.
2. Leverage - It is a ratio of overall leverage a firm has in comparison to it's overall equity. It tells about the long term debt a company has and how much it can affect the solvency of the firm in the long run .The lower the leverage ratio, the better it is for the company.
3. Inventory turnover ratio - it is the ratio that tells about how frequently the company is using and selling it's inventory. It is calculated by dividing the cost of goods sold by average inventory. The higher inventory turnover indicates that inventory are not lying over for much period.
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What is Current Ration, Leverage, and Inventory turnover in
companies financial report?
operating leverage ration of 5. A companies sales inclrease by 8%, what is the change in...
operating leverage ration of 5. A companies sales inclrease by 8%, what is the change in a companies profit? A.) profite decrease by 5% B.) profite increases by 13% C.) profite increasees by 40% D.) profite decreases by 40%
For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover
Required: 1a. For both companies compute the (a) current ratio, (b) acid-test ratio, (c) accounts receivable turnover, (d) inventory turnover, (e) days' sales in inventory, and (f) days' sales uncollected. (Do not round intermediate calculations.) 1b. Identify the company you consider to be the better short-term credit risk.
a) True or false: The simple rule for inventory turnover is that a low ration is...
a) True or false: The simple rule for inventory turnover is that a low ration is preferable. b) True or false: An error in the ending inventory balance will cause an error in the calculation of cost of goods sold. c) True or false: Underwood had cost of goods sold of $8 million and its ending inventory was $2 million. Therefore, its days' sales in inventory equals 25 days. d) True or false: The choice of an inventory valuation method...
3. If net profit is 3 percent, asset turnover is 6, and financial leverage is 2.1....
3. If net profit is 3 percent, asset turnover is 6, and financial leverage is 2.1. what is the return on assets? What does your result mean in your own words? The Card Shoppe last year had a gross margin of $1,500,000, a net profit of $250,000, and net sales were $2,000,000. What was the Card Shoppe's net profit margin? What does your result mean in your own words? A retailer has a net profit of $1,000,000, total assets of...
3. If net profit is 3 percent, asset turnover is 6, and financial leverage is 2.1....
3. If net profit is 3 percent, asset turnover is 6, and financial leverage is 2.1. what is the return on assets? What does your result mean in your own words? The Card Shoppe last year had a gross margin of $1,500,000, a net profit of $250,000, and net sales were $2,000,000. What was the Card Shoppe's net profit margin? What does your result mean in your own words? A retailer has a net profit of $1,000,000, total assets of...
Establish the relationship between a high inventory turnover ratio in the automobile industry and financial well-being...
Establish the relationship between a high inventory turnover ratio in the automobile industry and financial well-being of companies in that industry.
Which of the following generally indicates a negative change? The asset turnover increases. The financial leverage...
Which of the following generally indicates a negative change? The asset turnover increases. The financial leverage decreases. The return on equity increases. The earnings per share increases.
4. Debt (or financial leverage) management ratios Companies have the opportunity to use varying amounts of...
4. Debt (or financial leverage) management ratios Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed) and equity funds. Aunt Dottie's Linen Inc. reported no long-term debt in its most recent balance sheet. A company with no debt on its books is referred to as: O a company with no financial leverage, or an unleveraged company O a company with financial leverage, or a...
Calculate the inventory for a company whose Quick ration = 1.2; who's Current assets = $20,000;...
Calculate the inventory for a company whose Quick ration = 1.2; who's Current assets = $20,000; and whose Current ratio = 2.5
What is the inventory turnover ratio for 2014?
Financial ratios: Asset management. The financial statements for Tyler Toys, Inc. are shown in the popup window: Calculate the inventory turnover, days' sales in inventory, receivables turnover, days' sales in receivables, and total asset tumover for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concem for the managers of Tyler Toys or the shareholders? What is the inventory turnover ratio for 2014? (Round to four decimal places.)
a) True or false: The simple rule for inventory turnover is that a low ration is preferable. b) True or false: An error in the ending inventory balance will cause an error in the calculation of cost of goods sold. c) True or false: Underwood had cost of goods sold of $8 million and its ending inventory was $2 million. Therefore, its days' sales in inventory equals 25 days. d) True or false: The choice of an inventory valuation method...
3. If net profit is 3 percent, asset turnover is 6, and financial leverage is 2.1. what is the return on assets? What does your result mean in your own words? The Card Shoppe last year had a gross margin of $1,500,000, a net profit of $250,000, and net sales were $2,000,000. What was the Card Shoppe's net profit margin? What does your result mean in your own words? A retailer has a net profit of $1,000,000, total assets of...
3. If net profit is 3 percent, asset turnover is 6, and financial leverage is 2.1. what is the return on assets? What does your result mean in your own words? The Card Shoppe last year had a gross margin of $1,500,000, a net profit of $250,000, and net sales were $2,000,000. What was the Card Shoppe's net profit margin? What does your result mean in your own words? A retailer has a net profit of $1,000,000, total assets of...
4. Debt (or financial leverage) management ratios Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed) and equity funds. Aunt Dottie's Linen Inc. reported no long-term debt in its most recent balance sheet. A company with no debt on its books is referred to as: O a company with no financial leverage, or an unleveraged company O a company with financial leverage, or a...
Financial ratios: Asset management. The financial statements for Tyler Toys, Inc. are shown in the popup window: Calculate the inventory turnover, days' sales in inventory, receivables turnover, days' sales in receivables, and total asset tumover for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concem for the managers of Tyler Toys or the shareholders? What is the inventory turnover ratio for 2014? (Round to four decimal places.)
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