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FIN571 FIN571 WEEK 2 QUIZ (WILEYPLUS)

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Question;Which one of the following statements about;trend analysis is NOT correct?;All of these are true statements.;This benchmark is based on a firm's historical;performance;The Standard;Industrial Classification (SIC) System is used to identify benchmark;firms;It allows management to examine each ratio over;time and determine whether the trend is good or bad for the firm.;Coverage ratios: Sectors, Inc., has an;EBIT of $7,221,643 and interest expense of $611,800. Its depreciation for the;year is $1,434,500. What is its cash coverage ratio?;None of these;15.42 times;18.34 times;14.15 times;Multiples analysis: Turner Corp. has debt of $230 million and generated a net income;of $121 million in the last fiscal year. In attempting to determine the total;value of the firm, an investor identified a similar firm in Jacobs, Inc., an;all-equity firm. This firm had 150 million shares outstanding, a share price of;$14.25, and net income of $182 million. What is the total value of Turner;Corp.? Round to the nearest million dollars.;$1,421 million;$1,715 million;$1,651 million;$1,191 million;Coverage ratios, like times interest earned and;cash coverage ratio, allow;a firm's creditors to assess how well the firm;will meet its short-term liabilities other than interest expense.;a firm's management to assess how well they meet;short-term liabilities;a firm's creditors to assess how well the firm;will meet its interest obligations;a firm's shareholders to assess how well the;firm will meet its short-term liabilities;Peer group analysis can be performed by;management choosing a set of firms that are;similar in size or sales, or who compete in the same market.;using the average ratios of this peer group;which would then be used as the benchmark;identifying firms in the same industry that are;grouped by size, sales, and product lines, in order to establish benchmark;ratios.;Only a and b relate to peer group analysis;Efficiency ratio:If Viera, Inc., has an;accounts receivable turnover of 3.9 times and net sales of $3,436,812, what is;its level of receivables?;$81,234;$881,234;$1,340,357;$13,403,567

 

Paper#47444 | Written in 18-Jul-2015

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