Questions from Corporate Finance


Q: What does it mean when a firm window dresses its financial statements

What does it mean when a firm window dresses its financial statements?

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Q: Classify each of the following ratios according to a ratio category (

Classify each of the following ratios according to a ratio category (liquidity ratio, asset management ratio, debt management ratio, profitability ratio, or market value ratio).

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Q: Ecolap, Inc. (ECL) recently paid a $0

Ecolap, Inc. (ECL) recently paid a $0.46 dividend. The dividend is expected to grow at a 14.5 percent rate. At a current stock price of $44.12, what is the return shareholders are expecting?

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Q: For each of the following actions, determine what would happen to

For each of the following actions, determine what would happen to the current ratio. Assume nothing else on the balance sheet changes and that net working capital is positive.

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Q: Explain the meaning and significance of the following ratios

Explain the meaning and significance of the following ratios

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Q: A firm has an average collection period of 10 days. The

A firm has an average collection period of 10 days. The industry average ACP is 25 days. Is this a good or poor sign about the management of the firm’s accounts receivable?

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Q: A firm has a debt ratio of 20 percent. The industry

A firm has a debt ratio of 20 percent. The industry average debt ratio is 65 percent. Is this a good or poor sign about the management of the firm’s financial leverage?

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Q: Why is the DuPont system of analysis an important tool when evaluating

Why is the DuPont system of analysis an important tool when evaluating firm performance?

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Q: What approach should be used to forecast sales if a firm believes

What approach should be used to forecast sales if a firm believes that sales will increase over time?

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Q: A firm has an ROE of 10 percent. The industry

A firm has an ROE of 10 percent. The industry average ROE is 15 percent. How can the DuPont system of analysis help the firm’s managers identify the reasons for this difference?

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