All categories

3 years ago

Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time

Business

1 answer:

coldgirl [10]3 years ago

4 0

Answer:

Option C

Explanation:

In simple words, Horizontal analysis ( also referred to as pattern analysis) is indeed a method for the study of financial records that indicates improvements in the sums of the related products over a span of time. This is a valuable tool for determining pattern circumstances. The reports are being used in horizontal analysis for two different time intervals and is compared on percentage basis.

You might be interested in

Using the data set below, what would be the forecast for period 5 using the exponential smoothing method? Assume the forecast fo

elena55 [62]

Answer:

The answer is C: 14300

Note: The actual answer is 14296, and the closest to that was option C.

Explanation:

Formula to calculate forecast using Exponential smoothing:

$F_{t} = F_{t-1} + \alpha ( A_{t-1} - F_{t-1} )$

Where,

$F_{t}$ = New Forecast
$F_{t-1}$ = Previous period's forecast.
$\alpha$ = Smoothing Constant
$A_{t-1}$ = Previous period's Actual Demand.

Calculating the forecast for period 5:

Data:

$F_{5} = ?$
$F_{t-1} = 14000$
$\alpha = 0.4$
$A_{t-1} = 14750$

Putting values in the formula:

$F_{5} =$ $14000 + 0.4(14750-14000)$

$F_{5} = 14000 + 0.4 (740)$

$F_{5} = 14000 + 296$

$F_{5} = 14296$

4 0

3 years ago

Miltmar Corporation will pay a year-end dividend of $4, and dividends thereafter are expected to grow at the constant rate of 4%

____ [38]

Answer:

A. Market Capitalization rate = 13%

B. Intrinsic Value = $46.22

Explanation:

A. Market Capitalization rate:

CAPM should be used to calculate market capitalization from the given data. Following is the formula for CAPM

$CAPM=r+(MxB)$

r = risk free rate

M = market portfolio return

B = beta

Solution:

$CAPM=0.04+(0.75x0.12)$

CAPM = 13%

B. Intrinsic Value of stock

Gordon Growth Model (GGM) should be used to calculate intrinsic value of stock based on the given data.

Following is the formula for GGM

$GGM=Dx(1+g)/(r-g)$

D = Current Dividend

g = Dividend Growth rate

r = market capitalization rate (CAPM calculated in part A)

Solution:

$DDM=4x(1+0.04)/(0.13-.04)$

DDM = $46.22

Note: All values are rounded off to two decimal points.

7 0

3 years ago

What is the difference between earned income, passive income, and investment income?

Rudiy27

Explanation:

Earned income consists of income you earn while you are working a full-time job or running a business.

Passive income is income earned from rents, royalties, and stakes in limited partnerships.

Portfolio income is income from dividends, interest, and capital gains from stock sales.

4 0

2 years ago

Give the formulas for and plot average fixed cost, AFC, marginal cost, MC, average variable cost, AVC, and average cost, AC,

zloy xaker [14]

Answer:

AFC = $\frac{TFC}{q}$

MC = $\frac{d}{dq}$ TC

AVC = $\frac{TVC}{q}$

AC = $\frac{TC}{q}$

Explanation:

The cost function is given as $C=9+q^{2}$ .

The fixed cost here is 9, it will not be affected by the level of output.

The variable cost is $q^{2}$ .

AFC = $\frac{9}{q}$

MC = $\frac{d}{dq}$ TC

MC = $\frac{d}{dq}$ $C=9+q^{2}$

MC = 2q

AVC = $\frac{TVC}{q}$

AVC = $\frac{q^2}{q}$

AVC = q

AC = $\frac{TC}{q}$

AC = $\frac{[tex]C=9+q^{2}$ }{q}[/tex]

AC = $\frac{9}{q} +q$

3 0

3 years ago

When a financial friction is added to the short-run model it: Group of answer choices shifts the MP curve up. shifts the IS curv

Alexeev081 [22]

Answer:

When a financial friction is added to the short-run model it: shifts the MP curve up.

Explanation:

The short-run model, IS/MP model, describes the Investment-Savings/Monetary Policy model used by the US Federal Reserve to decrease the real interest rate through the Federal Funds rate, i.

The Federal Funds rate is the interest rate that commercial banks with excess reserves lend to others in deficit. The resulting shift occasions a decrease in the real interest rate which triggers an increase in the inflation rate, and vice versa. With such short-run changes in the interest rate, inflation and output is influenced in desirable directions by the Federal Reserve as a foundation to achieve long-term shifts in the AD-AS model.

The AD-AS model is a long-term model that describes Aggregate Demand and Aggregate Supply which impact long-term inflation, interest rates, and output.

7 0

3 years ago