___________ ratios examine the market value of a company’s share price, its profits and cash dividends, and the book value of the firm’s assets and relate them to other data items to determine how the firm is perceived in the stock market.
Market value or market based ratios help you determine what investors think about the firm’s growth prospects, using the company’s stock price, its cash dividends, and the book value of the company’s assets.
There are several groups of ratios most decision makers and analysts use to examine different aspects of a company's performance. Based on the descriptions of ratios listed, identify the relevant category of ratios. • Ratios that help determine whether a company can access its cash and pay its short-term obligations are called liquidity ratios. • Ratios that help determine the efficiency with which a company manages its day-to-day tasks and assets are called ratios. profitability market-value or market-based dividend policy...
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...
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...
12. Market value ratios Ratios are mostly calculated based on 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 Blue Dog Manufacturing Corp.: Blue Dog Manufacturing Corp. just reported a net income of $12,000,000, and its current stock price is $28.50 per share. Blue Dog is forecasting an...
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 $9,250,000 and a current stock price of...
5. Market value ratiosRatios 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 $14.75 per share....
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 $9,250,000 and a current stock price of $12.00 per share....
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...
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 $95,000,000, and a current stock price of $28.50 per share. The...
There are several groups of ratios most decision makers and analysts use to examine different aspects of a company’s performance. Based on the descriptions of ratios listed, identify the relevant category of ratios.•Ratios that help determine whether a company can access its cash and pay its short-term obligations are called___________ratios.