Suppose a company has a days sales outstanding (DSO) that is considerably higher than itsindustry average. If the company could reduceits accounts receivable to the point where itsDSO was equal to the industry average withoutaffecting its sales or its operating costs, howwould this affect (a) its free cash flow, (b) itsreturn on common equity, (c) its debt ratio,(d) its times-interest-earned ratio, (e) its EBITDAcoverage ratio, (f) its price/earnings ratio, and(g) its market/book ratio?

Q: Suppose Bank A has $35 million in rate-sensitive assets, $70 million in fixed rate assets, $70…

A: Market interest rate refers to the rate of interest imposed by banks on deposits, other interest…

Q: A firm wants to strengthen its financial position. Which of the following actions would increase its…

A: Here in this question, we are required to answer which of the option will increase current ratio.…

Q: Which risk ratios best answer each of the following financial questions? a. How quickly is a company…

A: Risk Ratio: This ratio indicates the health of the company. Here health means that the capital…

Q: Suppose a firm pays total dividends of $35,000 out of net income of $200,000. What would the firm's…

A: Total dividends= $35,000 Net income= $200,000 Firm's payout ratio=?

Q: Which of the following typically is true for profitability ratios? a. Growth stocks have lower price…

A: Profitability ratios are calculated to assess the company's ability to generate incomes relative to…

Q: Data on Nathan Enterprises for the most recent year are shown below, along with the days sales…

A: Financial Ratios:   Financial ratios are the metrics used to evaluate the liquidity, capabilities,…

Q: 9. Which of the following assumptions is embodied in the AFN equation? a. All balance sheet accounts…

A: In this question we have two multiple choice question and we need to answer them.

Q: Assume that the current ratio for Arch Company is 2.5, its acid-test ratio is 1.5, and its working…

A: Merchandise inventory is the inventory available for sale to the customers. Current ratio is a…

Q: Which of the following statements is most correct?

A: Current Ratio: It is a measure of liquidity and the capability of a firm to pay its short-term…

Q: Which of the following can lead to an increase in the net working capital of a firm?   A. A…

A: Net working capital  = Current Assets - Current Liabilities

Q: a) Calculate Earning per Share (EPS) under each of the three economic scenarios, before any debt is…

A: Information Provided; EBIT = $21,000 Marker value without debt = $165,000 Expansion = 25% higher…

Q: Which of the following statements is usually correct? A low receivables turnover is good for the…

A: Solution Concept Debt to equity ratio is mathematically given as =total debt / total equity A…

Q: Which of the following would most likely signal that a company may be using aggressiveaccrual…

A: The company always tries to manage earnings by deferring the expenses to the later periods to show a…

Q: How would answer this question? You are estimating your company's external financing needs for the…

A: SOLUTION- Reducing the collection period is the change that we need to make to company’s operating…

Q: Firm A has profit margin of 7.5%, sales revenue of $1 million, dividend payout ratio of 60%,…

A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: If Company A uses more debt than Company B and both companies have identical operations in terms of…

A: If A company utilizes more debt than that of B company then, interest will be charged on the debt…

Q: Prior to the end of the fiscal year a company decides to increase its sales by loosening its credit…

A: Accounts receivable- It includes those persons to whom entity sold goods on credit basis. For…

Q: Which of the following is true? O If a firm's volume of credit sales decreases, then its liquidity…

A: Following is the correct option.

Q: A firm with current assets of $85,750 and current liabilities of $62,958 would have:

A: Current ratio: The financial ratio which evaluates the ability of a company to pay off the debt…

Q: Using WACC, ignoring taxes, compute the cost of capital of a company with debt ratio of 0.75:1 and…

A: Debt ratio = 0.75 Equity ratio = 1-0.75 = 0.25 Debt cost = 4% Equity cost = 5%

Q: Investors and financial analysts wanting to evaluate the operation efficiency of a firm's managers…

A: Asset utilization ratios or asset management ratios are important for a company as it shows how…

Q: ou observe that a firm?s rofit margin is below the ndustry average, while its eturn on equity and…

A: you observer the firm, the profit margin is below the industry average, while its return on equity…

Q: A firm has been experiencing low profitability in recent years. Perform an analysis of the firm's…

A: DuPont Analysis - It is a framework for analyzing fundamental performance originally popularized by…

Q: Identify the ratio that is relevant to answering each of the following questions.a. How much net…

A: Hello,  I am only answering first three sub-parts as per the policy and if you want the others to be…

Q: Comment on the liquidity of the two companies. Which company has more risk of not satisfying its…

A: Operating Cycle is summation of Inventory Period and Account Receivable Period. That is, the period…

Q: A downward adjustment in a firm's payout ratio means that the firm is reinvesting a : proportion of…

A: Retention ratio refers to those portions of net income of the company which is not paid by the…

Q: a. Calculate the accounting break-even point. What is the degree of operating leverage at the…

A: a. Calculate the accounting break-even point by dividing the fixed cost (FC) which is $900,000 by…

Q: This refers to the point in the breakeven chart that indicates the sales volume at which the…

A: Break-even point (B.E.P.) is defined as the level of the production, where the production cost of…

Q: DAS Co. is preparing its financial forecast for next year and its AFN is negative. This means that…

A: The AFN or additional funds needed is a way to determine the actual fund requirement to check…

Q: Bulldogs inc. will least likely experience which of the following if the firm shifts its credit…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following generally indicates an improvement in a company’s financial position? The…

A: Financial position is defined as the current balances of the recorded the equities, liabilities, and…

Q: Hardwill Co. Used short term debt to buy common stock, increasing the price per share. The company's…

A: Answer: The correct answer is option B. The times interest earned decreased.

Q: Bob's Inc has the following balance sheet and income statement data  see image... The new CFO…

A: Return on equity (ROE) seems to be a financial performance metric that is derived by dividing net…

Q: Assuming the firm’s sales volume remained constant, would you expect it tohave a higher cash balance…

A:

Q: /hich of the following statements is the most reasonable conclusion from the given information below…

A: The debt ratio is the total debt being used as compared to total assets and it is indicative of the…

Q: Which of the following statements is most correct?(a) A decline in the inventory turnover ratio…

A: a) If there is a decline in inventory turnover ratio it indicates that the number of days stock held…

Q: How would each of the following factors affectratio analysis? (a) The firm’s sales are highly…

A: Ratio analysis refers to the comparison of various financial data extracted from the financial…

Q: Which of the following statements is TRUE? When EBIT and total assets both increase by 25%, the…

A: The question is related to identifying the true Statement.

Q: Suppose a firm pays total dividends of $420,000 out of net income of $3.7 million. What would the…

A: Dividend payout ratio refers to the fraction of net income that a company pays to its shareholders…

Q: Which one of the following will decrease the net working capital of a firm? Assume the current ratio…

A: Net working capital is calculated as difference of current assets and current liabilities

Q: Which of the following statements is correct? A. If a firm’s assets are growing at a positive…

A: AFN stands for “additional funds needed,” and it refers to the additional resources that will be…

Q: For each of the companies described here, would you expect it to have a low, medium, or high…

A: A dividend is a distribution of a portion of a company's earnings to a group of shareholders…

Q: cost of debt is determined by taking the present value of the interest payments and principal times…

A: Cost of capital refers to the rate of return which is required by the company in order to achieve…

Q: The WACC is a weighted average of the costs of debt, preferred stock, and common equity.Would the…

A: For the weighted average cost of capital, investment in a new venture costs a company and seems to…