Profit margin can be calculated as:
A. operating income/sales revenue.
B. operating income/average invested assets.
C. sales revenue/average invested assets.
D. average invested assets/sales revenue.
Answer: A
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Sweet Dreams Corp. has prepared the following financial statements:
a) Set up a worksheet similar to the one in Exhibit 4-4, page 124, and calculate all of the ratios for Sweet Dreams Corp.
b) Verify the change in 2017 Sweet Dreams Corp’s ROE using the Du Pont method.
c) Using the Altman’s model for privately held firms and public ones, calculate the Z-score for Sweet Dreams Corp. Assume that the market value of Sweet Dreams Corp. is $1,200,000.
d) Calculate Sweet Dreams Corp.’s economic profit for these years and compare it to net income. Assume that the weighted average cost of capital is 12%.
e) Using the following 2017 industry averages, evaluate Sweet Dreams Corp.’s financial situation. Set up a ratio analysis system similar to the one in Exhibit 3-6, page 92.
Why should the clustering of variables be used?
What will be an ideal response?
On January 2, 2010, Barham Corporation issued ten-year bonds payable with a face value of $400,000 and a face interest rate of 9 percent. The bonds were issued to yield a market interest rate of 10 percent. Interest is payable semi-annually on January 2 and July 1 . In calculating the present value of the bond issue on January 2, 2010,
a. the 9 percent rate will be used to calculate the present value of the face amount and the present value of the periodic interest payments. b. a 5 percent rate will be used to calculate the present value of the face amount and the present value of the periodic interest payments. c. the 10 percent rate will be used to calculate the present value of the face amount and the present value of the periodic interest payments. d. the 10 percent rate will be used to calculate the present value of the face amount and a 5 percent rate will be used to calculate the present value of the periodic interest payments.
The duty placed on employers and service providers to accommodate disability in the provision of employment, goods and services, education and transport is governed by which principle:
a. financial acceptability b. value for money c. reasonable adjustment d. common sense