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2 years ago

You find that a firm has a total debt ratio of 0. 63. what is the equity multiplier for this firm?

Business

1 answer:

Tamiku [17]2 years ago

8 0

A company's overall debt to equity ratio is $0.63$ . This company's equity multiplier is $1.63.$

The phrase "debt ratio" refers to a financial ratio that assesses how much leverage a business has. The ratio of total debt to total assets, represented as a decimal or percentage, is known as the debt ratio. The percentage of a company's assets that are financed by debt is one way to understand it. An asset-to-asset ratio greater than $1$ indicates that a significant portion of a firm's assets are financed by debt, which indicates that the corporation has more liabilities than assets. If interest rates abruptly increase, a company with a high ratio may be at risk of loan default. A ratio less than $1$ indicates.

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You might be interested in

Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. F

masha68 [24]

Answer:

Closing Units = (710 units - 490 units)= 220 units

a) FIFO : closing inventory = $14,040

Mar 18 purchase 20 *$62 =$1,240

Mar 25 purchase 200 *$64 = $12,800

b) LIFO : closing inventory = $12,780

Mar 1 opening = 90 * $52 =$4,680

Mar 18 purchase = 110 * $62 = $6,820

Mar 25 purchase = 20*$64 =1,280

c) Weighted Average Method (WAM) :

WAM= (Opening cost + purchases cost)/(opening units +units purchased)

= ($7,800+$14,250)/(150+250) = $55.125 cost before Mar 9 sale

WAM(after the first sale) = ($4,961.25 +$6,820 + $12,800)/(90+110+200)

= $61.45

Closing Inventory = $61.45*220 =$13,519

d) Specific Identification :Closing Inventory = $13,070

Mar 01 opening = 60 *$52 =$3,120

Mar 5 Purchase = 30*$57 =$1,710

Mar 18 Purchase = 40*$62 =$2,480

Mar 25 Purchase = 90*$64 =$5,760

Explanation:

The Question is incomplete. I have provided the missing part of the question below.

Date Activities Units Acquired at Cost Units Sold at Retail

Mar. 1 Beginning inventory 150 units $52.00/unit

Mar. 5 Purchase 250 units $57.00/unit

Mar. 9 Sales 310 units $87.00/unit

Mar. 18 Purchase 110 units $62.00/unit

Mar. 25 Purchase 200 units $64.00/unit

Mar. 29 Sales 180 units $97.00/unit

Totals 710 units 490 units

5 0

4 years ago

The fixed asset turnover ratio is computed as __________ divided by __________.

Yuri [45]

The correct option is (a) sales; average book value of fixed assets.

The fixed asset turnover ratio is computed as sales divided by average book value of fixed assets.

The fixed asset turnover ratio demonstrates the effectiveness of a company's current fixed assets in driving sales. A greater ratio suggests that management is making better use of its fixed assets. No information can be gleaned from a high FAT ratio about a company's capacity to produce reliable earnings or cash flows.

The ratio of sales to the value of fixed assets is known as fixed-asset turnover. It shows how effectively the company is generating sales by utilizing its fixed assets.

A greater ratio is typically preferred since it suggests that the business is effective at producing sales or revenues from its asset base. A lower ratio suggests that a business is not utilizing its resources effectively and may be experiencing internal issues.

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3 0

2 years ago

On December 28, I. Greasy Catering Company completed $600 of catering services. As of December 31, the customer had not been bil

nikdorinn [45]

Answer:

a. Debit Accounts receivable for $600

Explanation:

As Greasy catering company provided services but had not got the bill from the customer, it increases an asset. According to the revenue recognition principle, revenue has recognized whenever it is provided not when the cash is received. In that case, the journal entry to record the transaction is -

Accounts receivable (Debit) $600

Revenue (Catering) (Credit) $600

Accounts receivable is debit because the company owes the amount from the customers.

8 0

3 years ago

In 1895, the winner of a competition was paid $150. In 2006, the winner's prize was $70,000. What will the winner's prize be in

Jobisdone [24]

Answer:

the price will grow to $ 507,571.77 If it continues with the same grow rate

Explanation:

first we solve for the rate:

2006 - 1895 = 111 years

$Nominal (1+r)^{n} = FV\\150 (1+r)^{111} = 70,000\\\\r = \sqrt[111]{70,000 / 150 } -1$

r = 0.06

Now we apply this rate for the year 2040:

2040 - 2006 = 34 years

$Principal \: (1+ r)^{time} = Amount$

Principal 70,000.00

time 34.00

rate 0.06000

$70000 \: (1+ 0.06)^{34} = Amount$

Amount 507,571.77

6 0

3 years ago

Lito works for a business that is part of a large corporation with many diverse business lines that operate autonomously. Lito’s

irinina [24]

Answer: Conglomerate structure

Explanation: In simple words, conglomerate structure refers to the structure under which many entities operate in different industries under a single corporation. In other words, it is a different name for parent subsidiary relationship.

In the given case, Lito group owns different firms in different industries. Hence from the above we can conclude that the group uses conglomerate structure.

4 0

3 years ago