Question #1 Which ratio is used in the comparable multiples method? A) Quick ratio B) Current ratio C) Debt to equity ratio D) Price earnings ratio Question #2 Which financial behavior is historically caused by an increase in deregulations? A) Increase in risk taking by companies B) Increase in plant closure by companies C) Decrease in expansion planning by companies D) Decrease in new investment by companies

Question #1 Which ratio is used in the comparable multiples method? A) Quick ratio B) Current ratio C) Debt to equity ratio D) Price earnings ratio Question #2 Which financial behavior is historically caused by an increase in deregulations? A) Increase in risk taking by companies B) Increase in plant closure by companies C) Decrease in expansion planning by companies D) Decrease in new investment by companies

Name: Question #1 Which ratio is used in the comparable multiples method? A
Uploaded: 2024-03-20T06:33:21.000Z
Channel: Bartleby
Description: Question #1 Which ratio is used in the comparable multiples method? A) Quick ratio B) Currentratio C) Debt to equity ratio D) Price earnings ratio Question #2 Which financial behavior ishistorically caused by an increase in deregulations? A) Increas

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 10P

See similar textbooks

Similar questions

When converting dollar amounts on our financial statements to percentages for vertical analysis, what is it that makes this an easier way to compare companies to each other? A It provides a way for outside stakeholders to understand the numbers better in an easier format B It forces us to look closer at our financial statements to ensure we don't have missing amounts C It allows us to compare things based on growth or decline easier than comparing dollar amounts that could be vastly different values D It allows the analysis of numbers too large to comprehend by most stakeholders
Please see the attached graph for questions below. What is the difference between the two companies on this ratio? What is a plausible explanation as to why they would differ? Is one company clearly different than the other? Are there economic or end-market influences that explain why the ratios differ? What might they be? Over time, is each company’s overall financial performance improving, declining, or is something strange going on? Do you think evaluating financial statements is a good idea? What do you regard as some of the shortcomings of financial ratio analysis?
Ratios used to determine whether or not a company can survive over a long period of time are: Group of answer choices A)Liquidity ratios. b)Solvency ratios. c)Profitability ratios. d)Market indicators ratios. e)None of the above
Which is wrong about the use of financial statement analysis? a. Seasonality factors may contribute to a sort of distortion on the financial ratio’s trends. b. Activity ratios, such as profit margin and return on asset, tells how efficient the company uses its resources and assets c. Horizontal analysis of financial statements is conducted by analyzing inter-period financial statements d. The Liquidity of the company can be determined using acid-test ratio and current ratio
Select the term from the list provided that best matches each of the following descriptions or definitions: Another term for the current ratio Definition or Description Calculated by dividing dividends per share by the market price per share Presentation of too much information may serve to confuse users of the information Measure of efficiency in using assets; calculated as net sales divided by average total assets Measures of immediate debt paying ability A profitability measure, net income divided by net sales Measures the profitability of a company's assets base, also known as return on assets Analysis technique that compares an item from the financial statements with a key amount from the same year's financial statements Indicates the number of times, on average, that inventory is totally replaced during the year. Net income available for common stock divided by average number of outstanding shares Current assets minus current liabilities Ratio that measures how quickly a company…
How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and for different companies that are being compared? Are only balance sheet items or both balance sheet and income statement items affected?
DuPont system of analysis Use the following financial information for AT&T and Verizon to conduct a DuPont system of analysis for each company. Sales Earnings available for common stockholders Total assets Stockholders' equity a. Which company has the higher net profit margin? Higher asset turnover? b. Which company has the higher ROA? The higher ROE? c. Which company has the higher financial leverage multiplier? a. Net profit margin (Round to three decimal places.) AT&T Net profit margin AT&T $164,000 13,333 403,921 201,934 Verizon Verizon $126,280 13,608 244,280 24,232
In the Du Pont method of analysis the two key drivers of return on equity are: a) Profit margin and return on assets b) Return on assets and the financing plan c) Profit margin and the financing plan In trying to measure a company's effectiveness in earning an adequate return on sales we would use which groups of ratios? a) Profitability ratios b) Asset utilization ratios c) Liquidity ratios
Which of the following is NOT a measure of a company's profitability? a) Return on Investment (ROI) b) Earnings Before Interest and Taxes (EBIT) c) Gross Profit Margin d) Debt -to-Equity Ratio
Which of the following ratios would NOT be considered to be a measure of a business economic performance? A.Return on assets B.Inventory days C.Return on equity D.Sales growth
Compose a financial analysis based on your evaluation of the ratios. Comparison between 2020E ratios and industry averages - (c) Asset utilization ratios; (1) Are the 2020E ratios above, below, or equal to the industryaverages? 2) Is this a good thing or a bad thing for the company? and (3) What can be done to improve the weak ratios or to maintainthe strong ones? (d) Profitability ratios (1) Are the 2020E ratios above, below, or equal to the industryaverages? ( 2) Is this a good thing or a bad thing for the company? and (3) What can be done to improve the weak ratios or to maintainthe strong ones? (e) Market performance ratios. (1) Are the 2020E ratios above, below, or equal to the industryaverages? ( 2) Is this a good thing or a bad thing for the company? and (3) What can be done to improve the weak ratios or to maintainthe strong ones?
Which of the following typically is true for profitability ratios? a. Growth stocks have lower price to earnings ratios.b. Companies in more competitive industries have higher profit margins.c. The gross profit ratio declines as competition increases.d. When a company has debt, its return on equity will be lower than its return on assets.