1. What is the controllable margin of Greer Company? 2. What is the return on investment of Greer Company?
Q: Conventional wisdom says that one should measure a manager’s investment performance over an entire…
A: The arguments to support or contradict the convention are:
Q: What advantage does the Sharpe Ratio
A: Sharpe ratio is also known as Sharpes measure or reward to volatility ratio. It is the ratio…
Q: What does the price/earnings (P/E) ratio show? If one firm’s P/E ratio is lower thanthat of another…
A: Price-to-earnings ratio (P/E ratio): It is the proportion for the valuation of a stock calculating…
Q: operating
A: Operating leverage is a leverage which helps us to know the cost structure of a company & also…
Q: What is the comparison of Returned on Invested Capital between Alex Company and the industry…
A: Return on investment means the method used to estimate the efficiency or the profitability of the…
Q: risk implications of improving net profit margin to increase Return on Equity?
A: Net profit margin is the percentage of net profit to sales revenue
Q: If a firm could maximize either its current market price or its intrinsic value, whatwould…
A: Answer: Managers should focus on maximizing the intrinsic value. The intrinsic value increases…
Q: This ratio is fluid measure of the market’s confidence in the company’. The statement is valid in…
A: Ratio analysis is a significant tool for determining the financial position of a company, which can…
Q: What are the two fixed financial costs most commonly found on the firm’s income statement in respect…
A: In finance, the term “leverage” represents use of outsiders’ funds to finance capital assets of the…
Q: Which of the following decision criteria is the easiest to use and very popular among investors?…
A: The capital budgeting process uses different methods to analyze the projects. Each method has…
Q: Explain what is the Weighted Average Cost of Capital (WACC) and why is it important for a company…
A: Weighted average cost of capital is the rate at which a company is expected to pay for its…
Q: How should (a) signaling and (b) the clienteleeffect be taken into account by a firm as it considers…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: What is the most likely impact on return on equity of an increase in operating expense margin, all…
A: Operating expenses are required to run the business. AN increase in operating expenses reduces the…
Q: Why is a firm’s value maximized if it invests to the point where its marginal return onnew…
A: The firm’s value is maximized when the Marginal return on new investment is equal to the kc because…
Q: The internal rate of return for Company A is close to
A: IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a…
Q: Which one of the following is most closely related to the net present value profile? A: Payback B:…
A: The net present value method is used to evaluate the investment projects. We can evaluate the…
Q: Why is profitability analysis necessary, with a particular emphasis on return on investment? When…
A: Profitability is a phrase that relates to the metric used to quantify earnings. Profitability…
Q: what is the first price the company setts the pen lo have marginally profitable? Knowing that
A: The length of time it takes for an investment to generate a profit after the initial outlay of…
Q: 1. What is the controllable margin of Black Company? 2. What is the average operating assets of…
A: Solution:- 1) calculation of controllable margin of Black Company as follows:-
Q: If a firm increases its leverage, which extended Du Pont equation ratio is directly affected?
A: Du Pont Equation: The DuPont analysis is a structure for examining fundamental performance spread by…
Q: Which one is more appropriate for cost of retained earning? A. Weighted Average cost of capital…
A: Retained earnings are the part of net income that is not distributed to the shareholders in form of…
Q: Would the shareholders of Harmony Limited be satisfied with the return on their investments?…
A: Formula used:
Q: Which one of the following is minimized when the value of the firm is maximized? A- WACC B- Return…
A: To maximize the value of the firm, it is important to have a fair cash flow for the firm. Value of…
Q: While selecting a company for investment, it is good to select company having_____ leverage O a.…
A: Leverage means amount of debt financing done by the company.
Q: What is the blend of long-term financial sources used to finance the firm which may include debt,…
A: Explanation: The blend of long term financial resources that is used to finance the firm may include…
Q: Does the successful investment decision increase a company's market value?
A: Meaning of Market Value of a Company The value of a company in connection with the financial markets…
Q: What can you say about the market value of the company? is it positve or is negative?
A: In finance market value of a company is the worth of the company and the worth of the company is…
Q: How do you measure Return on Investment (ROI) of alogistics firm?
A: Return on Investment (ROI) : It represents the benefits earned by the investor in…
Q: a. Consider two investment opportunities A and B. Investment A: Expected return =0.08, Standard…
A: Since you have posted multiple questions, we will answer the first one for you. If you want a…
Q: What is Weighted Average Cost of Capital or WACC? How can current economic and political…
A: Weighted average cost of capital is the cost of capital to the firm inclusive of the cost of capital…
Q: Why is the WACC (weighted average cost of capital) important? When is it useful to a company?
A: Weighted average cost of capital is important to determine the minimum required return of all the…
Q: If the firms earns rate of return on its investments equal to the required rate of return it is…
A: The rate of return on its investments reflects the return earned on the given investment by the…
Q: Compare Dividend Valuation Model with Capital Asset Pricing Model in the context of calculating cost…
A: The dividend discount model and the capital asset pricing model are two methods for estimating cost…
Q: What is the a required return for this company?
A: Information Provided: Beta = 1.90 Risk-free rate = 10% Expected market return = 20%
Q: Is the accounting rate of return (ARR) the same thing as the return on investment (ROI)?
A: Yes, Accounting rate of return (ARR) the same thing as the Return on investment (ROI). The…
1. What is the controllable margin of Greer Company?
Step by step
Solved in 2 steps
- Use the table for the question(s) below. Name Gannet New York Times McClatchy Media General Lee Enterprises Average Maximum Minimum Enterprise ($ OA. $3.17 OB. $0.32 C. $0.19 D. $3.49 Market Capitalization (S Value million) 6350 2423 675 326 267 million) 10,163 3472 3061 1192 1724 Price/ Enterprise Value/ Enterprise Value/ Book 0.73 P/E 7.36 18.09 2.64 9.76 1.68 14.89 0.39 6.55 0.82 11.33 1.25 +60% 112% 40% -69% Sales 1.4 1.10 1.40 1.31 1.57 1.35 +16% 18% EBITDA 5.04 7.21 5.64 7.65 6.65 6.44 +22% 19% The table above shows the stock prices and multiples for a number of firms in the newspaper publishing industry. Another newspaper publishing firm (not shown) had sales of $620 million, EBITDA of $80 million, excess cash of $60 million, $15 million of debt, and 120 million shares outstanding. If the firm had an EPS of $0.44, what is the difference between the estimated share price of this firm if the average price - earnings ratio is used and the estimated share price if the average…Blossom and Telecommunications Corporation has three divisions. The names of these divisions, along with the after-tax cost ofcapital for each division and the market value of the assets in each division, are as follows:Division NameCost of CapitalMV of AssetsInfrastructure development6.45$185,000,000Power5.50$241,000,000Telecommunications6.10$500,000,000EvWhat is the overall after-tax cost of capital for Blossom and Telecommunications? (Round answer to 2 decimal places, e.g. 52.75%.)After-tax cost of capitalCalculate the sales margin, asset turnover, and ROA for the companies below: Average Capital Assets Company A B Net Income Sales 350,000 5,500,000 12,000,000 .06 845,000 9,350,000 13,500,000 Sales Margin 1 Asset Turnover 2.9 1.44 Note: Please write the sales Margin and ROI as a percentage or as a decimal rounded to two places behind the decimal point. ROI 6,500,000 4,150,000
- The income statement comparison for Rush Delivery Company shows the income statement for the current and prior year. A. Determine the operating income (loss) (dollars) for each year. B. Determine the operating income (percentage) for each year. C. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the ROI. Was the decision to invest additional assets in the company successful? Explain. D. Assuming an 8% cost of capital, calculate the RI for each year. Explain how this compares to your findings in part C.Net Income Planning Selected operating data for Venora Company in four independent situations are shown below. Fill in the blanks for each independent situation. A B C D Sales $410,000 $ 129,000 C. $ 530,000 e. $630,000 Variable expense $ 270,000 a. $57,000 $ 159,000 f. $ 378,000 g. Fixed expense $ 10,000 b. $56,000 $240,000 $270,000 Net income (loss) before tax $130,000 $16,000 $131,000 $(18,000) Units sold 7,000 213,000 x d. Unit contribution margin $20 $9 Contribution margin ratio 0.7 40 × h.See Image for Information Compute the following performance indices for both companies: Profit margin Asset turnover Return on Capital Employed (ROCE) Current ratio Debt equity ratio Compare and analyse the performance of the two companies computed in (1) above and explain what the board of Box Limited needs to do to achieve their objective . c. Which other non-financial measures can influence the decision of the board of Box Limited?
- Simple ROI and Residual Income Calculations. Consider the following data: 1.) DIVISION X Y Z Invested Capital P2,000,000 (1)1,300,000 P1,250,000 Income (2) 100,000 P182,000 P 150,000 Revenue P4,000,000 P3,640,000 (3) 3,750,000 Income Percentage of Revenue 2.5% (4) 5% (5) 4% Capital Turnover (6) 2 (7) 2.8 3 Rate of Return on Invested Capital (8) 5% 14% (9) 12% Required: 1. Which division is the best performer 2. Suppose each division is assessed an imputed interest rate of 20% on invested capital. Compute the residual income for each division.Data for Uberto Company are presented in the following table of rates of return on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $780,000 $187,200 (a) 13% (b) (c) $620,000 (d) (e) (f) $74,400 $24,800 $330,000 (g) 14% (h) $36,300 (i) $250,000 $50,000 (j) 12% (k) (l) Determine the missing values, identified by the letters above. For all amounts, round to the nearest whole number. a. fill in the blank % b. $ fill in the blank c. $ fill in the blank d. $ fill in the blank e. fill in the blank % f. fill in the blank % g. $ fill in the blank h. fill in the blank % i. $ fill in the blank j. fill in the blank % k. $ fill in the blank l. $ fill in the blankThe following data relates to the XYZ Corporation and its X Division. X Division sales P 8,000,000 X Division operating income P 480,000 X Division total assets P 2,000,000 X Division current liabilities P 600,000 Corporate target rate of return 14% Corporate weighted average cost of capital 10% Corporate effective tax rate 30% What is the X Divisions Economic Value Added (EVA)?
- using the table find the folloing for the four firms: Enterprise value to EBITDA Ratio Price-Earnings multiole PEG raio Cpmpany Market Value (OMR million) Net Income (OMR million) Earnings Growth Market Value of Equity (OMR million) Market Value of Debt (OMR million) Cash (OMR million) EBITDA (OMR million) Happy 117.95 22.5 4% 53.07 64.87 41.25 43.85 Smart 112.35 20.25 4.5% 59.53 52. 79 45 44.88 Kind 116.26 21 4.65% 69.76 46.5 63.95 28.20 Cheerful 120 24 5% 42 78 62.4 44.32B. ABC Corporation is a diversified company with 3 divisions organized as investment centers. Data for the year ended Dec 31, 20X2 are as follows: Fee Revenue Operating Expenses Invested Assets Retail Division 1,250,000 750,000 3,125,000 Electronic Division 750,000 682,500 250,000 Banking Division 1,500,000 1,170,000 2,000,000 REQUIRED: Compute for the profit margin, investment turnover and return on investment. Explain which of the divisions will you recommend for additional funding.Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Mutual FundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee revenue $1,010,000 $1,060,000 $1,030,000 Operating expenses 492,000 390,400 727,600 Invested assets 3,700,000 3,100,000 2,100,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department cost allocations. E.F. Lynch CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y8 MutualFundDivision ElectronicBrokerageDivision InvestmentBankingDivision Fee…