You have the following information: total assets = $200 million; risk-adjusted assets = $90 million; owners' equity = $3.5 million; Trust-preferred securities = $0.7 million; loan loss reserve = $1.5 million; & subordinated debt = $2 million Calculate: 1. Equity Capital Ratio 2. Tier 1 Ratio 3. Total Capital Ratio

You have the following information: total assets = $200 million; risk-adjusted assets = $90 million; owners' equity = $3.5 million; Trust-preferred securities = $0.7 million; loan loss reserve = $1.5 million; & subordinated debt = $2 million Calculate: 1. Equity Capital Ratio 2. Tier 1 Ratio 3. Total Capital Ratio

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter9: Projecting Financial Statements

Section: Chapter Questions

Problem 3bM

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You are given the following information. What is your liquidity ratio? Annual disposable income: $45,000 Total liabilities: $17,400 Annual savings: $2,400 Long-term assets: $85,000 Current ratio: 2 Debt-to-asset ratio: 0.2 Select one: a. 0.90 b. 0.56 c. 0.89 d. 0.53
Determine Debt-Equity Ratio, Proprietary Ratio and Funds Proportion Ratios with the help of folowine information: Description Amount ? Equity Capital Profit & Loss A/C(Profit) Reserves & Surplus 10,00,000/- 5,00,000/- 3,00,000/- 2,50,000/- 30,00,000/- 5,00,000/- 15,00,000/- 1,50,000/- 5,00,000/- 45,75,000/- Premium on Issue of Shares & Debentures Debentures Long Term Fixed Deposits Accepted Long Term Bank Loans Provision for Divided & Taxation Short Term Bank Loans Fixed Assets
Calculate ‘Total Assets to Debt ratio’ from the following information : Equity Share Capital 4,00,000 Long Term Borrowings 1,80,000 Surplus i.e. Balance in statement of Profit and Loss 1,00,000 General Reserve 70,000 Current Liabilities 30,000 Long Term Provisions 1,20,000
The current ratio is O a solvency measure that indicates the margin of safety for bondholders O calculated by dividing current liabilities by current assets calculated by subtracting current liabilities from current assets O used to evaluate a company's liquidity and short-term debt-paying ability Question 19 On the statement of cash flows, a $9,000 gain on the sale of fixed assets would be O added to net income in converting the net income reported on the income statement to cash flows from operating activities O deducted from net income in converting the net income reported on the income statement to cash flows from operating activities O deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends O added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
a. Perform a Du Pont analysis on Green Valley. Assume that the industry average ratios are as follows: Total margin 3.5% Total asset turnover 1.5 Equity multiplier 2.5 Return on equity (ROE) 13.1% b. Calculate and interpret the following ratios: Industry Average Return on assets (ROA) Current ratio 5.2% 2.0 Days cash on hand 22 days Average collection period 19 days Debt ratio 71% Debt-to-equity ratio 2.5 Times interest earned (TIE) ratio 2.6 Fixed asset turnover ratio 1.4 c. Assume that there are 10,000 shares of Green Valley's stock outstanding and that some recently sold for $45 per share. • What is the firm's price/earnings ratio? What is its market/book ratio? (Hint: These ratios are discussed in the supplement to this chapter.)
Assume the following information is given:Income statementNet sales sh. 200,000Operating income 10,000 Balance sheetCurrent assets 95,000Total assets 150,000 Current liabilities 80,000Total liabilities 125,000Retained earnings 25,000 The market value of equity is sh. 300,000Required:Evaluate the credit worthiness of the borrower using Altman Z
The following information relates to Basic Lid. for the year ended 31" December 2021: Net working capital RO. 1.200.000 Fixed assets to proprietor's fund ratio 0.75 Working capital turnover ratio 5 timeg Return on Equity 15% Current liabilities RO. 400.000 Long term Debts 0 You are required to calculate: Proprietor's funds Fixed Assets Current assets Net profit ratio Current ratio
ACCOUNTING ASAP Assume the following data: EBIT = 100; Depreciation = 40; Interest = 20; Dividends = 10. Calculate the cash coverage ratio. Select one: a. 7.0x b. 4.7x c. 14.0x d. 5.0x
Exercise n°6. Consider this simplified balance sheet for Geomorph Trading: Current liabilities Long-term debt Other liabilities Equity Current assets $ 100 $ 60 Long-term assets 500 280 70 190 $ 600 $ 600 a. Calculate the ratio of debt to equity. (Round your answer to 2 decimal places.) b-1. What are Geomorph's net working capital and total long- term capital? b-2. Calculate the ratio of debt to total long-term capital. (Round your answer to 2 decimal places.) Exercise n°7. Magic Flutes has total receivables of $3,000, which represent 20 days' sales. Total assets are $75,000. The firm's operating profit margin is 5%. Assume a 365-day year. 3/4 a. What is the firm's sales-to-assets ratio? (Round your answer to 2 decimal places.) b. What is the firm's return on assets? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Exercise n°8. a. If a firm's assets of $10,000 represent 200 days' sales, what is its annual sales? Assume a 365-day…
Using the following balance sheet, calculate net working capital: Cash Marketable Securities Accounts receivable Inventory Current assets Net fixed assets Total assets Select one: O A. $60.00 O B. $40.00 O C. $10.00 O D. $90.00 $10 Accounts payable 30 Accruals 50 Notes payable 40 Current liabilities $130 Long-term debt 100 Common equity Retained earnings $230 Total liab. & equity $20 20 50 $90 0 30 50 $230
STEP 3: Solve Calculating the four benchmark financial ratios found in Table 15.3, we get the following: Ratio with Ratio Existing Common Stock with Debt Financing Ratio Formula Ratio Financing Debt ratio Total Liabilities 35.2% 26.4% 51.5% Total Assets Interest-bearing Interest-Bearing Debt 20.1 15.1 40.2 debt ratio Total Assets Times interest Net Operating Income or EBIT 27.08 31.25 11.72 earned Interest Expense Depreciation Amortization 6.84 8.20 3.08 EBITDA Earnings Before coverage ratio Interest and Taxes Expense Expense Principal Payments Interest Expense + (- 1 Tax Rate STEP 4: Analyze Whether the entire $10 million is raised by issuing equity or by borrowing has a dramatic effect on the firm's capital structure. For example, the debt ratio will either drop from 35.2 percent to 26.4 percent if equity is used or increase to 51.5 percent if debt is used. The interest-bearing debt ratio will change in a similar manner, dropping from 20.1 percent to 15.1 percent if equity financing…
A. Calculate the Weights for debt, common equity, and preferred equity. (round final answers to 4 decimal places) Debt: Preferred Equity: Common Equity: B. Calculate the cost of debt % C. Calculate the cost of preferred equity % D. calculate the cost of common equity % E. What is the firms weighted average cost of capital (WACC)%