Explain the four main equity valuation ratios where “Price” is the numer-ator. Give one positive AND negative consideration to using each ratio in financial analysis.

Rand Company produces dry fertilizer. At the beginning of the year, Rand had the following standard cost sheet: Direct materials (8 lbs. @ $1.25) $10.00 Direct labor (0.15 hr. @ $18.00) 2.70 Fixed overhead (0.20 hr. @ $3.00) 0.60 Variable overhead (0.20 hr. @ $1.70) 0.34   Standard cost per unit $13.64 Overhead rates are computed using practical volume, which is 49,000 units. The actual results for the year are as follows: Units produced: 53,000 Direct materials purchased: 408,000 pounds at $1.32 per pound Direct materials used: 406,800 pounds Direct labor: 10,500 hours at $17.95 per hour Fixed overhead: $36,570 Variable overhead: $18,000 MPV=28,560 UNFAV   MUV=21,500 FAV   LRV=525 FAV   LEV=45,900 UNFAV   FIXED SPENDING VARIANCE= 7,170 UNFAV   FIXED VOLUME VARIANCE= 2,400 FAV   VARIABLE SPENDING= 150 UNFAV   VARIABLE EFFICIENCY= 4,335 UNFAV    Prepare journal entries for the following: The purchase of direct materials The issuance…

Business ratios of financial statements are generally categorized as one of the following areas, EXCEPT Select one: a. Leverage b. Profitability c. Net Present Value d. Liquidity e. Efficiency (or Activity)

The return on equity ratio equals net income divided by common stock. True or False

Indicate one ratio from each of the three categories (profitability, liquidity, and solvency) that you believe to be most indicative of future performance.

The most important of the three distinct types of decisions when it comes to value creation.    a. financing decision b. investment decision c. dividend decision d. liquidity decision

4. According to the basic DuPont equation, a firm's ROE is the product of what other two ratios? a. net profit margin and the equity multiplier b. ROA and the equity multiplier C. net profit margin and return on equity d. net profit margin and total asset turnover

The return on equity is calculated using which of the following formulas? Multiple Choice Net income Stockholders' equity Net income - Average stockholders' equity Net income ÷ Common Stock Net income ÷ Retained earnings

1. Which of the following is referred to as the Accounting Equation? Assets Liabilities + Equity Equity Liabilities + Assets Liabilities Assets + Equity Assets = Liabilities - Equity = 2. Which of the following make up the Finance Equation? (select all that apply) Revenues = Price x Volume Costs = Fixed + Variable Profit Revenues-Costs Income Sales - COGS

Which of the following ratios is not considered to be a test of profitability? Group of answer choices A)Current ratio. B)Net profit margin. C)Return on assets. D)Earnings per share. e)None of the above