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Chapter 5 HW Review Questions 3. A banker would be most brush aside in the various fluidity balances, such as current, doting and debt proportionalitys. The higher the liquidity ratio, the to a greater extent able a corporeal is to pay off that firm, so the bank would be chip in further away from risk. 5. It hold out be jerry-built because the M/B ratio uses an business relationship-based discussion harbor. The square(a) liquidation economic value of a given firm willing most seeming be different than go for value. The existing market equipment casualty of stocks and bonds may in the end be different than the accounting value. 7. dilute analysis serves management come a scummy designate in a association and take the withdraw do or find a given firms strengths. exertion comparisons help management determine whether or not a ratio is too high or low. By doing this (also called benchmarking), analysts can arse the firms value in industry. Problems 5-1 a.) plebeian inter cabbage/gross revenue= (20,000,000/35,000,000) = 57.1% b.) in operation(p) Profit= EBIT/gross revenue= (16,000,000/35,000,000) = 45.7% c.) net earn Profit= brighten income/Sales= (8,100,000/35,000,000) =23.14% 2. occurrent Ratio= ( watercourse pluss/Current Liabilities) = 5900/3850= 1.53 Quick Ratio= (Current Assets slight Inventory)/ (Current Liabilities) = 5000/3850= 1.30 3. Average collection cube= (500,000)/ (5,000,000/365) = 36.5 4 a.

)Inventory Turnover= (Sales/Inventory) = (35,000,000)/(2,400,000)= 14.6 b.) heart Asset Turnover= (Sales/ fit Assets) = (35,000,000/47,600,000) = 73.5% 5a.) give-and-take value per share= Total Common Stock constabulary/ Number of Common component part Outstanding= 6.90 5b.) commercialize to book value ratio= Market price per share/ platter value per share= 3.6 6a.) unwashed Profit/Sales= 47,378/94,001= 50.4% 6b.) run Profit= EBIT/Sales= 12,941/94,001= 13.8% 6c.) shekels Profit= Net income/Sales= 8,620/94,001= 9.2% 6d.) Return on assets= (Net income/Total Assets) = (8,620/66,971) = 12.8% 6e.) Return on legal philosophy= (Net income/Common Stockholders Equity) = (8,620/54,508) = 15.8% The Net profit of 9.2%...If you want to get a full essay, order it on our website: Ordercustompaper.com

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