Homework Answers
Let us first understand the concept of Profitability Ratios
Profitability ratios are metrics used by potential investors to evaluate the capability of an organization to earn profits.
In most cases, higher the ratio, the better it is.
Some of the most common profitability ratios are as follows
1. Gross profit margin
Formula = Gross Profit / Sales revenue
2. Net profit margin
Formula = Net Income / Sales revenue
3. Return on Assets
Formula = Net Income / Average Total Assets
4. Return on Equity
Formula = Net Income = Average Shareholders' Equity
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4-15 Name four popular ratios for measuring profitability, and indicate how to compute each of the...
How do you evaluate each of the four groups of financial ratios, including liquidity ratios, asset...
How do you evaluate each of the four groups of financial ratios, including liquidity ratios, asset efficiency (asset management) ratios, capital structure (solvency) ratios, profitability ratios, and market value ratios? Use examples to describe formulas, explain calculation steps and sources of data (input from which financial statement—income statement or balance sheet), and state final answers.
4. Profitability ratios
4. Profitability ratiosProfitability ratios help in the analysis of the combined impact of liquidity ratios, asset management ratios, and debt management ratios on the operating performance of a firm.Your boss has asked you to calculate the profitability ratios of Petroxy Oil Co. and make comments on its second-year performance as compared with its first-year performance.The following shows Petroxy Oil Co.’s income statement for the last two years. The company had assets of $5,875 million in the first year and $9,398...
Consider the 5 types of financial ratios discussed in chapter 4: Performance, Profitability, Efficiency, Leverage, and...
Consider the 5 types of financial ratios discussed in chapter 4: Performance, Profitability, Efficiency, Leverage, and Liquidity measures. Identify a person or persons who would be interested in each of these ratios (it does not have to be the same person for all 5), and to what use they would put these ratios.
Q-1 CLASSIFICIATON OF FINANCIAL RATIOS Indicate whether each of the following financial ratios would be classified...
Q-1 CLASSIFICIATON OF FINANCIAL RATIOS Indicate whether each of the following financial ratios would be classified as a test of profitability, liquidity, or solvency or a market test when performing ratio analysis Tests of Profitabilit Tests of Liquidity Tests ofMarket Tests Financial Ratios Turnover Ratio Cash Coverage Ratio ash Ratio t Ratio Average Age of Receivables Average Days' Supply in Inventory bt-to-Equity Ratio ings per Share (EPS) Financial Leverage Percentage Fixed Asset Turnover Ratio nventory Turnover Ratio e/ Earnings (P/E)...
2021 was 50,000. Compute selected ratios, and compare liquidity, profitability, and solvency for two companies P15...
2021 was 50,000. Compute selected ratios, and compare liquidity, profitability, and solvency for two companies P15.5 (LO 2) Selected financial data of Target (USA) and Wal-Mart Stores, Inc. (USA) for a recent year are presented below (in millions). Wal-Mart Target Stores, Inc. Corporation Income Statement Data for Year $476,294 358,069 91,353 $72,596 51,160 Net sales Cost of goods sold 16,816 Selling and administrative expenses Interest expense Other income (expense) Income tax expense 2,335 1,126 (410) 8,105 (391) 1,132 $ 16,022...
Name four of these variables, and for each variable, briefly, describe a numerical observation that might...
Name four of these variables, and for each variable, briefly, describe a numerical observation that might be the result of measuring the variable?
Tidy work and explanation 1. BE 22.64.ALGO (Algorithmic) Brief Exercise 12-64 (Algorithmic) Profitability Ratios Meade Publications...
Tidy work and explanation
1. BE 22.64.ALGO (Algorithmic) Brief Exercise 12-64 (Algorithmic) Profitability Ratios Meade Publications is a magazine publisher established in Southern California. Financial analysts are concerned about Meade's ability to generate positive returns as printed material becomes less popular than digital material Financial analysts observe the following account balances from Meade to determine financial ratios Revenue Expenses Net income Assets Liabilities Average equity $1,155,000 1,050,000 350,000 937,500 175,000 600,000 Required: Compute Meade's return on equity. Round your answer...
18. (15 pts) Nomenclature: Provide the systematic IUPAC name for each of the following molecules. Indicate...
18. (15 pts) Nomenclature: Provide the systematic IUPAC name for each of the following molecules. Indicate stereochemistry if applicable (Cis, Trans). 19. (6 pts) Draw all constitutional isomers of C&H Brz.
PROBLEM ANALYSIS: PROFITABILITY RATIOS Bank A has net profit after taxes of $2.4 million and the...
PROBLEM ANALYSIS: PROFITABILITY RATIOS Bank A has net profit after taxes of $2.4 million and the following balance sheet: Reserves Loans Securities Assets 10 60 40 Balance Sheet (million) Liabilities and Capital Deposits 70 Borrowings 10 Bank Capita 30 On the other hand, bank B has net profit after taxes of $3.1 million and the following balance sheet: Balance Sheet (million) Assets Liabilities and Capital Reserves 20 Deposits 80 Loans 40 Borrowings 15 Securities 60 Bank Capita 25 For each...
Just need the return on total assets eBook Show Me How Calculator Print Item Profitability Ratios...
Just need the return on total assets
eBook Show Me How Calculator Print Item Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 2017, 2016, and 2015: December 31 2017 2016 20YS Total assets $5,200,000 $5,000,000 $4,800,000 Notes payable (6% Interest) 2,500,000 2,500,000 2,500,000 Common stock 250,000 250,000 250,000 Preferred 2.5% stock, $100 par (no change during year) 500,000 500,000 500,000 Retained earnings 1,574,000 1,222,000 750,000 The 2017 net income was...
Q-1 CLASSIFICIATON OF FINANCIAL RATIOS Indicate whether each of the following financial ratios would be classified as a test of profitability, liquidity, or solvency or a market test when performing ratio analysis Tests of Profitabilit Tests of Liquidity Tests ofMarket Tests Financial Ratios Turnover Ratio Cash Coverage Ratio ash Ratio t Ratio Average Age of Receivables Average Days' Supply in Inventory bt-to-Equity Ratio ings per Share (EPS) Financial Leverage Percentage Fixed Asset Turnover Ratio nventory Turnover Ratio e/ Earnings (P/E)...
2021 was 50,000. Compute selected ratios, and compare liquidity, profitability, and solvency for two companies P15.5 (LO 2) Selected financial data of Target (USA) and Wal-Mart Stores, Inc. (USA) for a recent year are presented below (in millions). Wal-Mart Target Stores, Inc. Corporation Income Statement Data for Year $476,294 358,069 91,353 $72,596 51,160 Net sales Cost of goods sold 16,816 Selling and administrative expenses Interest expense Other income (expense) Income tax expense 2,335 1,126 (410) 8,105 (391) 1,132 $ 16,022...
Tidy work and explanation
1. BE 22.64.ALGO (Algorithmic) Brief Exercise 12-64 (Algorithmic) Profitability Ratios Meade Publications is a magazine publisher established in Southern California. Financial analysts are concerned about Meade's ability to generate positive returns as printed material becomes less popular than digital material Financial analysts observe the following account balances from Meade to determine financial ratios Revenue Expenses Net income Assets Liabilities Average equity $1,155,000 1,050,000 350,000 937,500 175,000 600,000 Required: Compute Meade's return on equity. Round your answer...
18. (15 pts) Nomenclature: Provide the systematic IUPAC name for each of the following molecules. Indicate stereochemistry if applicable (Cis, Trans). 19. (6 pts) Draw all constitutional isomers of C&H Brz.
PROBLEM ANALYSIS: PROFITABILITY RATIOS Bank A has net profit after taxes of $2.4 million and the following balance sheet: Reserves Loans Securities Assets 10 60 40 Balance Sheet (million) Liabilities and Capital Deposits 70 Borrowings 10 Bank Capita 30 On the other hand, bank B has net profit after taxes of $3.1 million and the following balance sheet: Balance Sheet (million) Assets Liabilities and Capital Reserves 20 Deposits 80 Loans 40 Borrowings 15 Securities 60 Bank Capita 25 For each...
Just need the return on total assets
eBook Show Me How Calculator Print Item Profitability Ratios The following selected data were taken from the financial statements of Vidahill Inc. for December 31, 2017, 2016, and 2015: December 31 2017 2016 20YS Total assets $5,200,000 $5,000,000 $4,800,000 Notes payable (6% Interest) 2,500,000 2,500,000 2,500,000 Common stock 250,000 250,000 250,000 Preferred 2.5% stock, $100 par (no change during year) 500,000 500,000 500,000 Retained earnings 1,574,000 1,222,000 750,000 The 2017 net income was...
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