Which of the following ratios indicate strong capacity for a company? Select ALL correct answers.Low profit margin ratio
Low asset turnover ratio
Low operating margin ratio
Low debt to equity ratio
High debt service coverage ratio

Answers

Answer 1

Answer:

The ratios that indicate a strong capacity for a company are Low debt to equity ratio and High debt service coverage ratio.

Debt service coverage ratio is an example of a coverage ratio. It measures the solvency of a firm. A high ratio indicates greater solvency when compared with a low ratio.

Debt to equity ratio is an example of a debt ratio. A high debt to equity ratio indicates higher financial risk and weaker solvency. Thus, a lower ratio is more desirable.

To learn more about financial ratios, please check: brainly.com/question/14171325

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A customer call center is evaluating customer satisfaction surveys to identify the most prevalent quality problems in their process. Specific customer complaints have been analyzed and grouped into eight different categories. Every instance of a complaint adds to the count in its category. Which Six Sigma analytical tool would be most helpful to management here?

Answers

Pareto chart is the Sigma Analytical tool which is used for management.

Explanation:

It is a chart or a graph that is used to represent defects and their cumulative so that analyses can indicate areas that need improvements or changes. It also indicates the statistical occurrence of these defects and their impact. It can be applied in different areas that deals with data and data analysis such as communicating data with others and where there are many problems but one wishes to focus on the most significant.

Specifically to the question the problems have been identified and isolated, therefore this tool can be used to analyse data of the already identified problems, the frequency of occurrence and causes of these defects.

Which of the following statements is NOT CORRECT? a. Foreign bonds and Eurobonds are two important types of international bonds.
b. A Eurodollar is a U.S. dollar deposited in a bank outside the U.S.
c. The term Eurobond applies only to foreign bonds denominated in U.S. currency.
d. Any bond sold outside the country of the borrower is called an international bond.
e. Foreign bonds are bonds sold by a foreign borrower but denominated in the currency of the country in which the issue is sold.

Answers

Answer:

b. A Eurodollar is a U.S. dollar deposited in a bank outside the U.S.

Explanation:

A Eurodollar is a bond issued by a foreign company in US dollars instead of heir own domestic currency. Eurodollars are issued and redeemable at the foreign country, no the US. It has nothing to do with money deposited in banks outside of the US, since it refers to bonds, not deposits.

. A rise in the price of corn will cause a (Click to select) in the Supply Curve for corn. b. A decrease in the price of seed (an input to corn) will cause a (Click to select) in the Supply Curve for corn. c. A decrease in the local number of grocery stores will cause a (Click to select) in the Supply Curve for corn.

Answers

Answer:

move along upwards

shift out

shift in

Explanation:

A change in price of a good leads to a movement along the supply curve and not a shift of the supply curve.

Other factors other than a change in the price of the good would lead to a shift of the supply curve. Such factors include :

A change in the price of input
A change in the number of suppliers
Government regulations

When the price of corn increases, the quantity supplied of corn increases. this is in line with the law of supply.

according to the law of supply, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.

This would lead to a movement up along the supply curve

If the price of seed which is an input to corn decreases, it becomes cheaper to produce corn. As a result, the supply of corn would increase. this would lead to an outward shift of the supply curve.

If the number of grocery stores decreases, there would be a reduction in supply. As a result, the supply curve would shift inwards

Two investment advisers are comparing performance. One averaged a 19% return and the other a 16% return. However, the beta of the first adviser was 1.5, while that of the second was 1.a. Can you tell which adviser was a better selector of individual stocks (aside from the issue of general movements in the market)?
First Investment Advisor
Second Investment Advisor
Cannot be determined

b. If the T-bill rate were 6% and the market return during the period were 14%, which adviser would be the superior stock selector?
First Investment Advisor
Second Investment Advisor
Cannot be determined

c. What if the T-bill rate were 3% and the market return 15%?
First Investment Advisor
Second Investment Advisor
Cannot be determined

Answers

Answer:

a. Cannot be determined

b. Second Investment Advisor

c. Second Investment Advisor

Explanation:

a. Since all the information is not given in the question so we are not able to give advise. As abnormal return is calculated from subtracting the expected return from the return. But no such information is provided in the question.

b. We know that

Abnormal return = Return - expected return

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

In case of First Investment Advisor:

The return is 19%

And, the expected return equal to

= 6% + 1.5 × (14% - 6%)

= 6% + 1.5 × 8%

= 6% + 12%

= 18%

So abnormal return = 19% - 18% = 1%

In case of Second Investment Advisor:

The return is 16%

And, the expected return equal to

= 6% + 1 × (14% - 6%)

= 6% + 1 × 8%

= 6% + 8%

= 14%

So abnormal return = 16% - 18% = 2%

So, Second Investment Advisor should be accepted as it has high abnormal return then first investment Advisor

c. In case of First Investment Advisor:

The return is 19%

And, the expected return equal to

= 3% + 1.5 × (15% - 3%)

= 3% + 1.5 × 12%

= 3% + 18%

= 21%

So abnormal return = 19% - 21% = -2%

In case of Second Investment Advisor:

The return is 16%

And, the expected return equal to

= 3% + 1 × (15% - 3%)

= 3% + 1 × 12%

= 3% + 12%

= 15%

So abnormal return = 16% - 15% = 1%

So, Second Investment Advisor should be accepted as it has high abnormal return then first investment Advisor

A firm's current profits are $1,400,000. These profits are expected to grow indefinitely at a constant annual rate of 4 percent. If the firm's opportunity cost of funds is 7 percent, determine the value of the firm: Instructions: Enter your responses rounded to two decimal places. a. The instant before it pays out current profits as dividends. $ 49933333.33 million b. The instant after it pays out current profits as dividends.

Answers

Answer:

a. $49,933,333.33 million

b. $48,533,333.33 million

Explanation:

The computations are presented below:

a. For current profits as dividends in before case

= Profits × (1 + opportunity cost) ÷ (opportunity cost - growth rate)

= $1,400,000 × (1 + 0.07) ÷ (0.07 - 0.04)

= $1,400,000 × 35.6666

= $49,933,333.33 million

b. For current profits as dividends in after case

= Profits × (1 + growth rate) ÷ (opportunity cost - growth rate)

= $1,400,000 × (1 + 0.04) ÷ (0.07 - 0.04)

= $1,400,000 × 34.6666

= $48,533,333.33 million

Final answer:

Using the Gordon growth model, the value of the firm before dividend payouts is calculated to be $49,933,333.33. However, instantly after the dividend payouts, the firm's value becomes zero.

Explanation:

The value of the firm can be determined using the Gordon growth model, which is used to determine the value of a firm or stock that pays dividends that are expected to grow at a constant rate. In such a scenario, the firm's value is equal to the dividends of the next period (D1) divided by the required rate of return minus the growth rate of dividends.

Part A: The firm's value, before the payouts, can be calculated as:

Value = D0 * (1+g) / (k-g) = $1,400,000 * (1+0.04) / (0.07-0.04) = $49,933,333.33

Part B: The firm's value, after payouts, assumes that the firm's capital has come back to the company and will start accumulating again once the next cycle begins. Thus the firm's value would become zero.