A company has the following items for the fiscal year 2020:Total Equity = 15 millionTotal Assets = 30 millionEBIT = 4 millionInterest expense = 1 millionCalculate the company’s equity multiplier and interest coverage ratio Write the formula for the following ratios and what each ratio measures:Asset turnoverInventory Turnover and Days InventoryReceivable Collection PeriodWrite down the DuPont framework. How would you explain to your non-MBA non-Finance friend about the DuPont framework and why it is important?A company has the following items for the fiscal year 2020:Revenue = 10 millionEBIT = 4 millionNet income = 2 millionTotal Equity = 15 millionTotal Assets = 30 millionCalculate the company’s net profit margin, asset turnover, equity multiplier and ROE Explain cash conversion cycle and why it is important to companies?Is it possible that a company has a negative cash cycle? Is it a good thing or a bad thing?A company has days of inventory 80 days, days receivable of 30 days, and days payable of 90 days. Calculate the company’s funding gap.Use your own words to explain the following:Weighted Average Cost of Capital (WACC): formula and what it measuresCost of Debt: formula and what it measuresCapital Asset Pricing Model (CAPM): formula and what it measuresIf risk free rate is 2%, market risk premium (also called the equity risk premium) is 5%, and a company has a beta of 1.5. What is the company’s cost of equity?

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Answered: A company has the following items for…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 2MC

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A company has the following items for the fiscal year 2020:

Total Equity = 15 million
Total Assets = 30 million
EBIT = 4 million
Interest expense = 1 million

Calculate the company’s equity multiplier and interest coverage ratio

Write the formula for the following ratios and what each ratio measures:

Asset turnover
Inventory Turnover and Days Inventory
Receivable Collection Period

Write down the DuPont framework. How would you explain to your non-MBA non-Finance friend about the DuPont framework and why it is important?

A company has the following items for the fiscal year 2020:

Revenue = 10 million
EBIT = 4 million
Net income = 2 million
Total Equity = 15 million
Total Assets = 30 million

Calculate the company’s net profit margin, asset turnover, equity multiplier and ROE

Explain cash conversion cycle and why it is important to companies?
Is it possible that a company has a negative cash cycle? Is it a good thing or a bad thing?

A company has days of inventory 80 days, days receivable of 30 days, and days payable of 90 days. Calculate the company’s funding gap.

Use your own words to explain the following:

Weighted Average Cost of Capital (WACC): formula and what it measures
Cost of Debt: formula and what it measures
Capital Asset Pricing Model (CAPM): formula and what it measures

If risk free rate is 2%, market risk premium (also called the equity risk premium) is 5%, and a company has a beta of 1.5. What is the company’s cost of equity?

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A company has the following items for the fiscal year 2020:

Total Equity = 15 million
Total Assets = 30 million
EBIT = 4 million
Interest expense = 1 million

Calculate the company’s equity multiplier and interest coverage ratio

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A company has the following items for the fiscal year 2020: Total Equity = 15 million Total Assets = 30 million EBIT = 4 million Interest expense = 1 million Calculate the company’s equity multiplier and interest coverage ratio