Questions from Financial Management

Q: All State Trucking Co. has the following ratios compared to its

All State Trucking Co. has the following ratios compared to its industry for last year. Explain why the return-on-assets ratio is so much more favorable than the return-on-sales ratio compared to th...

Q: Gates Appliances has a return-on-assets (investment)

Gates Appliances has a return-on-assets (investment) ratio of 8 percent. a. If the debt-to-total-assets ratio is 40 percent, what is the return on equity? b. If the firm had no debt, what would the re...

Q: Using the Du Pont method, evaluate the effects of the following

Using the Du Pont method, evaluate the effects of the following relationships for the Butters Corporation: a. Butters Corporation has a profit margin of 7 percent and its return on assets (investment)...

Q: Jerry Rice and Grain Stores has $4,780,000

Jerry Rice and Grain Stores has $4,780,000 in yearly sales. The firm earns 4.5 percent on each dollar of sales and turns over its assets 2.7 times per year. It has $123,000 in current liabilities and...

Q: Assume the following data for Cable Corporation and Multi-Media Inc

Assume the following data for Cable Corporation and Multi-Media Inc. a. Compute the return on stockholders’ equity for both firms using ratio 3a. Which firm has the higher return?...

Q: A firm has sales of $3 million, and 10 percent

A firm has sales of $3 million, and 10 percent of the sales are for cash. The year-end accounts receivable balance is $285,000. What is the average collection period? (Use a 360-day year.)

Q: Explain how the zero-coupon rate bond provides a return to

Explain how the zero-coupon rate bond provides a return to the investor. What are the advantages to the corporation?

Q: Martin Electronics has an accounts receivable turnover equal to 15 times.

Martin Electronics has an accounts receivable turnover equal to 15 times. If accounts receivable are equal to $80,000, what is the value for average daily credit sales?

Q: Database Systems is considering expansion into a new product line. Assets

Database Systems is considering expansion into a new product line. Assets to support expansion will cost $380,000. It is estimated that Database can generate $1,410,000 in annual sales, with an 8 perc...

Q: Perez Corporation has the following financial data for the years 20X1 and

Perez Corporation has the following financial data for the years 20X1 and 20X2: a. Compute inventory turnover based on ratio number 6, Sales/Inventory, for each year. b. Compute inventory turnover b...