The most popular way of analyzing information is the Ratio analysis. Please state which financial ratio is the most important in your opinion and why.
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The most popular way of analyzing information is the Ratio analysis. Please state which financial ratio is the most important in your opinion and why.
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- A business has a limited number of items upon which one can perform a financial analysis. true or false?Discuss what needs to be completed, besides the calculation and interpretation of ratios, to complete an effective financial ratio analysis? (Discuss the three parameters)Company X has seen a sharp decline in Return on Equity. Briefly explain how ratio analysis (or DuPont analysis) can be used to investigate the source of this decline.
- Your friend started their own company a few years ago. During covid they experienced a lot ofchallenges, especially with leave pay. He also heard about IAS19 but is not sure what it is about. Heis asking for your advice regarding short-term employee benefits, as well as your assistance basedon the following information relating to the company:At the end of the current financial year being the 30 June 2022, the company has 80 middlemanagers, 20 top managers and 10 partners in the company. As compensation for their services,the following compensation packages are awarded:• Middle managers are compensated with an average salary of R900 000 per annum and havea total of 25 days annual leave.• Top managers are compensated with an average salary of R1 200 000 per annum, with atotal of 22 days leave per annum.• Partners in the company are paid an average salary of R1 800 000 per annum.Per their employment contracts, annual leave may be carried forward for one financial period andis…Determine a capital good (an item with a useful life in excess of 1 year) that you need to acquire for your business. How will this asset improve the efficiency or effectiveness of your business? How is the future benefit of the asset translated into the present and quantified for a profitable decision for your business? Which technique to evaluate the data best suits your business? Explain.The first step in performing projected financial analysis is to • prepare the projected balance sheet. forecast sales as accurately as possible. take an inventory of goods. calculate the projected net income. estimate increases in debt.
- Financial ratio analysis is conducted by three main groups of analysts: credit analysts, stock analysts, and managers. What is the primary emphasis of each group, and how would that emphasis affect the ratios on which they focus? Why would the inventory turnover ratio be more important for someone analyzing a grocery store chain than an insurance company? Over the past year, M.D. Ryngaert & Co. had an increase in its current ratio and a decline in its total asset’s turnover ratio. However, the company’s sales, cash, and equivalents, DSO, and fixed assets turnover ratio remained constant. What balance sheet accounts must have changed to produce the indicated changes? Profit margins and turnover ratios vary from one industry to another. What differences would you expect to find between the turnover ratios, profit margins, and DuPont equations for a grocery store and a steel company? How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and…3. Explain horizontal and vertical analysis and when you would use one over the other.4. Discuss a money management challenge in a business setting and how you would overcome it.Why does the advantage of Portfolio analysis is It raises the issue of cash-flow availability for use in expansion and growth?
- Read the following case carefully and answer the given questions.You have recently become Head of Finance at Oman Catering Company Muscat, acompany which deals in the specialized area of food and dining. Its expertise lies in theindustrial catering and related services, mainly for Government institutions, CommercialEstablishments and hotels. Your previous employer was Renaissance Catering CompanySohar, where, as finance manager, you had the opportunity to work on areas relating tofinancial accounting, procurement, contracts, and bids.One of Oman Catering Company’s major contracts is with Renaissance CateringCompany. The contract is now up for renewal, and Oman Catering Company ispreparing a competitive bid for this contract. You have been asked to lead the teamresponsible for bidding for this contract. You also suspect that your knowledge andexperience of Renaissance Catering Company were good reasons for appointing you tothe position at Oman Catering Company. You do not want to let…Your aunt Nokhona completed her dentistry studies at Sefako Makgatho Health Sciences Universitynot long ago. She has been operating her dental practice for six months now. She knows you arestudying financial management and she asks you to help her identify possible items of monetary andnonmonetary information she should include in her monthly report. In assisting her, she needs to knowitems to include and examples so that she gets a better understanding.Income taxes have the effect of Select one : a decreasing the cost of capital for the firm. B. None of these c. decreasing the cost of debt. D. increasing the cost of debt
