Intermediate Financial Management
14th Edition
ISBN: 9780357516782
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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Chapter 7, Problem 3Q
Summary Introduction
To determine: The explanation for the change.
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Over the past year, Stop-n’-Shop has realized an increase in its current ratio and a drop in itstotal assets turnover ratio. However, the firm’s sales revenues, quick ratio, and fixed assetsturnover ratio have remained constant. What might explain these changes?
Over the past year, M.D. Ryngaert & Co. has realized an increase in its current ration and a drop in its total assets turnover ratio. However, the company’s sales, quick ration, and fixed assets turnover ratio have remained constant. What explains these changes?
Which of the following statements is TRUE?
When EBIT and total assets both increase by 25%, the basic earnings power will also increase
O a.
An increase in the quick ratio over time means that the company's liquidity position is improving.
O b.
approximately by 25%.
A lower than the industry's average inventory turnover ratio means that the company turns over or sells
O C.
and replaces its inventory more times per year.
A higher than industry average P/E ratio indicates the company's stock must be overvalued.
d.
Chapter 7 Solutions
Intermediate Financial Management
Ch. 7 - Financial ratio analysis is conducted by managers,...Ch. 7 - Prob. 3QCh. 7 - Profit margins and turnover ratios vary from one...Ch. 7 - How might (a) seasonal factors and (b) different...Ch. 7 - Why is it sometimes misleading to compare a...Ch. 7 - Greene Sisters has a DSO of 20 days. The companys...Ch. 7 - Vigo Vacations has $200 million in total assets,...Ch. 7 - Winston Watch’s stock price is $75 per share....Ch. 7 - Reno Revolvere has an EPS of $1.50, a cash flow...Ch. 7 - Needham Pharmaceuticals has a profit margin of 3%...
Ch. 7 - Prob. 6PCh. 7 - Ace Industries has current assets equal to 3...Ch. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 7 - Data for Lozano Chip Company and its industry...Ch. 7 - Why are ratios useful? What three groups use ratio...Ch. 7 - Prob. 9MCCh. 7 - What are some qualitative factors that analysts...
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