ZuoTi.Pro
Question

Imagine that you are a chief financial officer with $150,000 of idle cash that you must...

Imagine that you are a chief financial officer with $150,000 of idle cash that you must invest to increase earnings for your company. Select at least two companies and the ratios you would use to determine your investment strategy. Based on the companies you choose, speculate on how the ratios are likely to change over the next five years.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Being the Chief Financial Office of the company, the investment strategy to invest the idle cash of $150000 would to invest in two different sectors. The companies which would be selected to invest in are Amazon and Apple because of their growth pattern and good return to the investors. The ratios which have attract an investor to invest in the company are:

RATIOS AMAZON APPLE
Return on Equity 12.91 49.36
Interest Coverage 5.09 21.93
Current Ratio 1.04 1.12

The companies are having a good record towards the growth, regular dividend payments and having a positive current ratio showing keeping with great liquid assets to pay of the liabilities. As per the pattern of the growth of the companies, it could be well presumed that the companies turnover and the income would double in next five years.

===================

0 0
Add a comment
Know the answer?
Add Answer to:
Imagine that you are a chief financial officer with $150,000 of idle cash that you must...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • "Investment Strategy"  Please respond to the following: From the e-Activity, evaluate at least two companies’ financial statements...

    "Investment Strategy"  Please respond to the following: From the e-Activity, evaluate at least two companies’ financial statements that have received a negative rating from one of the financial rating agencies. Determine which financial ratios most likely impacted the rating decision. Compare and contrast at least two financial ratios that support the rating agency's claims. Speculate on how the ratios are likely to change considering the economic environment in which it operates. Support your position. Imagine that you are a chief financial...

  • Let’s imagine that you are the Chief Financial Officer of a British car manufacturer and that...

    Let’s imagine that you are the Chief Financial Officer of a British car manufacturer and that your company sells a large number of its products in the US. Your team thinks that the US dollar is going to appreciate (increase) in value compared to the British pound in the next financial quarter. What would you recommend in order to manage the risk of this anticipated change in foreign exchange rates? Be specific.

  • DQ #1 There are three major Financial Ratings Agencies. Are the factors used to assess a...

    DQ #1 There are three major Financial Ratings Agencies. Are the factors used to assess a company's rating the same for each of the three agencies? DQ #2 Imagine that you are a chief financial officer with $150,000 of idle cash that you must invest to increase earnings for your company. Select one company and two ratios you would use to determine your investment strategy. Briefly explain why you chose the ratios. DQ #3 What would be the implications to...

  • You are the Chief Financial Officer at a pension fund. You are trying to determine how...

    You are the Chief Financial Officer at a pension fund. You are trying to determine how much you need in the fund to be able to cover your company’s pension obligation. You estimate that you will have to pay out $20 million per year, each year (starting next year) for the rest of time. How much must you have in the pension fund to just cover your obligation if you earn 5% APR compounded annually on your investment? A)   $400...

  • 5. The chief financial officer of PartsCo has asked you to rerun the forecast of the...

    5. The chief financial officer of PartsCo has asked you to rerun the forecast of the company's income statement and balance sheet at a growth rate of 3 percent. If the company generates more cash than it needs, how could the balance sheet be adjusted to handle this? What alternatives exist to handle new cash? 6. The chief financial officer of PartsCo returns and explains that there is a pos- sibility of a huge contract being awarded to the company....

  • 5.5 Manipulating the Statement of Cash Flows You are the company's chief financial officer. It is...

    5.5 Manipulating the Statement of Cash Flows You are the company's chief financial officer. It is early December, and your accountants have produced financial statements showing provisional results for the year. (Your company's fiscal year ends on 31 December.) You show these to the CEO who then expresses concern about several figures. One figure in particular, cash flow from operations (CFFO), appears low. The CEO wonders if any- thing can be done before the end of the year to increase...

  • Assume you are the Chief Operating Officer of a small financial institution and considering blockchain for your business...

    Assume you are the Chief Operating Officer of a small financial institution and considering blockchain for your business. Explain the steps, i.e. why you will likely be using a blockchain, what type of blockchain, using a scenario and explain how that would be effective in your type of business.

  • You are the chief investment officer of a $100,000,000 pension fund. I your analysis of the...

    You are the chief investment officer of a $100,000,000 pension fund. I your analysis of the pension fund you believe that there is a 80% chance that the fund earns an average annual return of +6 over the next 3 years and 20% chance that the fund earn an average return of negative _2.0% over the next 3 years. What is the expected value of the portfolio I three years?

  • You have recently been promoted to the position of Chief Scientific Officer (CSO) at a medium-sized...

    You have recently been promoted to the position of Chief Scientific Officer (CSO) at a medium-sized biotech company in Montgomery County, MD (an obvious advantage afforded you for taking this course). The focus of the company is the development of a recombinant protein-based poliovirus vaccine that is administered sublingually. You have been tasked with giving a talk to a group of venture capitalist in support of the company’s drive to secure funding for a phase 3 clinical trial. Below is...

  • Lane Miller, who was recently appointed Chief Financial Officer of Midas Ltd, is considering utilising some...

    Lane Miller, who was recently appointed Chief Financial Officer of Midas Ltd, is considering utilising some excess funds to invest in the shares of Queen Ltd. Between 2015 and 2019, Queen Ltd has been performing very well and is expected to increase profits over the next three to four years. Queen Ltd has regularly paid dividends and is expected to pay dividends for the foreseeable future. There have been, in recent years some sales of inventory and non-current assets between...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT