Question

In a sheet of performance measures, leverage is listed simply as D/E. But this number is...

In a sheet of performance measures, leverage is listed simply as D/E. But this number is representative of an important choice made by the farm financial manager. Why is this choice important, and what methods are available to help you make this decision?

0 0
Add a comment Improve this question Transcribed image text
Answer #1

D/E ratio refers to debt equity ratio, this ratio tells us the percentage of debt and equity in capital structure of the company or how much of assets are financed with debt or with equity. Finance manager plays a very important role in the formation of capital structure of the company, various factors like cost of source of finance, tax benefits, dilution of control and tenure of the funds are the factors which are considered in capital structure planning. various methods of financing are issuance of common stock, preferred stock, issuance of bonds and long tenure term loan or funds retained in business are the method through which capital is arranged.

Add a comment
Know the answer?
Add Answer to:
In a sheet of performance measures, leverage is listed simply as D/E. But this number is...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

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
  • given: Calculate all of the missing performance measures in the sheet “Performance Measures for Vandelay Farms"...

    given: Calculate all of the missing performance measures in the sheet “Performance Measures for Vandelay Farms" seen below. “CF” is the statement of cash flow summary for Vandelay Farms. Based on the performance ratios, is Vandelay Farms in any kind of financial trouble? Why or why not? We were unable to transcribe this imageWe were unable to transcribe this imageStatement of Cash Flow Summary for Vandelay Farms Pro farma Cash flows from operating activities 2018 Cash received from farm production...

  • The performance measures/metrics used to assess organizational performance are many. The measures employed by managers must...

    The performance measures/metrics used to assess organizational performance are many. The measures employed by managers must be applicable/relevant and vary depending on certain issues. Once we are able to measure strategic initiatives, we can manage them. Listed below are three corporate-level strategies/initiatives discussed in class. For each corporate-level strategy/initiative listed below, offer three (3) performance measures relevant (i.e., especially meaningful) for monitoring the success of that particular strategy/initiative. Offer the measure and explain why it is especially relevant for that...

  • Brian has a loan on a round baler. List all the places on the balance sheet...

    Brian has a loan on a round baler. List all the places on the balance sheet where we would see information related to this loan (give the line name and section of the balance sheet each would be on)? List two effects/impacts of completely writing off (depreciating) a tractor the year it is purchased? Dustin purchased a new grain harvester using money from his operating loan. How would this affect his liquidity? What might it do to working capital and...

  • 5) The WSJ Dollar Index A) measures stock performance of 500 large companies listed on the stock exchange. B) is co...

    5) The WSJ Dollar Index A) measures stock performance of 500 large companies listed on the stock exchange. B) is composed of 16 currencies that make up 80% of the Forex market. C) was created in 2001. D) All of the above. 6) Suppose your U.S. firm will receive EUR1,000,000 in one year. The interest rate on the euro is 5% pa and on the U.S. dollar is 3% pa. The current spot rate for the euro is $1.00. If...

  • Financial versus non-financial performance measures: manufacturer Your best friend, Jason Bell, has just graduated from university...

    Financial versus non-financial performance measures: manufacturer Your best friend, Jason Bell, has just graduated from university and started his first job as a trainee accountant in a medium-sized manufacturing company. One of the first things that he notices is that the monthly manufacturing performance reports focus only on costs and profits. One of his major tasks is to produce this report and provide a written commentary for management that explains the causes of high or low monthly performance. Key issues...

  • As an HR professional why would it be important to understand performance management technology and e-compensation?...

    As an HR professional why would it be important to understand performance management technology and e-compensation? Specifically tell me some of the positives and negatives of performance management technology. In addition, also discuss ONE of the four e-compensation objectives listed in our reading material, as well as the e-compensation tools that were recommended to address the objective that you picked. Lastly, go to the APUS on-line Library and find an article from any magazine that relates to our discussion question....

  • EXHIBIT 14-26 Summary of Analytical Measures Ratios or Other Measurements Method of Computation Significance Measures of...

    EXHIBIT 14-26 Summary of Analytical Measures Ratios or Other Measurements Method of Computation Significance Measures of short-term liquidi Current ratio ab Current Liabilities Quick ratio A measure of short-term debt Current Liabilities A measure of short-term debt tes the cash generated by operations Indicates ability to cover currently maturing Indicates how quickly receivables are collected Indicates in d ons Average Inventory to sell the a 365 Days Days to Sell I Free cash flow Net Cash from Debt ratic ion...

  • The four key users of financial statements are owners/managers, lenders, investors and governments. These users rely...

    The four key users of financial statements are owners/managers, lenders, investors and governments. These users rely on financial statements to evaluate a company’s past financial performance as indicators in areas of profitability, liquidity, leverage, and efficiency; to create benchmarking matrixes; and to support future decision-making. Choose two companies in the same industry whose financial statements are available online. Complete several financial ratios for each company and compare them. Share your analysis and answer the following questions in a minimum of...

  • Given the above Finacail Statemtns, Calculate all of the missing performance measures in sheet “PM” (below)...

    Given the above Finacail Statemtns, Calculate all of the missing performance measures in sheet “PM” (below) for Vandelay Farms.“CF” is the statement of cash flow summary for Vandelay Farms. Based on the performance ratios, is Vandelay Farms in any kind of financial trouble? Why or why not? Balance Sheet Summary for Vandelay Farms Historica Pro 2017 Current assets Cash, savings, and marketable securities Crops, feed, and supplies Market livestock Accounts receivable Other current assets All personal assets Total current assets...

  • Problem 11-19 Internal Business Process Performance Measures (LO11-3) Tombro Industries is in the process of automating...

    Problem 11-19 Internal Business Process Performance Measures (LO11-3) Tombro Industries is in the process of automating one of its plants and developing a texible manufacturing system. The company is finding it necessary to make many changes in operating procedures. Progress has been slow, particularly in trying to develop new performance measures for the factory in an effort to evaluate performance and determine where Improvements can be made, management has gathered the following data relating to activities over the last four...

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