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Papessa [141]
3 years ago
10

In financial management, risk is referred to as the environmental factors that may affect a business adversely. internal factors

that may disrupt the smooth functioning of a company. degree of uncertainty about the actual outcome of a decision. various strategies implemented by managers to increase returns.
Business
1 answer:
VARVARA [1.3K]3 years ago
6 0

Answer:

Option C The degree of uncertainty about the actual outcome of a decision.

Explanation:

The reason is that risk is the vulnerability of an desired outcome and which can be measured. So if toss a coin there are 50% chances that head will appear and I will loose money and 50 percent chances that tail will appear and I win money. So undesired outcome here is head appearing because I will loose money and it has 50% chances. So risk result in undesired outcome in an uncertain environment.

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The comparative statements of Carla Vista Co. are presented here.
Irina18 [472]

Answer:

Carla Vista Co.

(a) Earnings per share = $3.57

(b) Return on common stockholders’ equity = 34.31%

(c) Return on assets = 19.79%

(d) Current ratio = 1.82

(e) Accounts receivable turnover = Net Sales/Average Receivable = 16.18 times

(f) Average collection period = 365 Days /Average Receivable Turnover ratio = 22.56 days

(g) Inventory turnover = Cost of goods sold/Average Inventory = 8.68 times

(h) Days in inventory = 42.05 days

(i) Times interest earned = 3.46 times

(j) Asset turnover = 1.81

(k) Debt to assets ratio = Total Debt/Total Assets = 42.31%

(l) Free cash flow = Cash from Operations - Capital Expenditures = $116,000

Explanation:

a) Data and Calculations:

CARLA VISTA CO.

Income Statements

For the Years Ended December 31

                                                               2017          2016

Net sales                                          $1,897,540   $1,757,500

Cost of goods sold                            1,065,540     1,013,000

Gross profit                                          832,000       744,500

Selling and administrative expenses 507,000       486,000

Income from operations                     325,000      258,500

Other expenses and losses:

Interest expense                                   24,000        22,000

Income before income taxes              301,000      236,500

Income tax expense                             94,000        75,000

Net income                                      $ 207,000    $ 161,500

CARLA VISTA CO.

Balance Sheets

December 31

Assets                                                            2017           2016

Current assets

Cash                                                           $ 60,100     $ 64,200

Debt investments (short-term)                    74,000        50,000

Accounts receivable                                   124,800      109,800

Inventory                                                     128,000       117,500

Total current assets                                  386,900      341,500

Plant assets (net)                                      659,000     530,300

Total assets                                          $1,045,900    $871,800

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable                                 $ 167,000     $152,400

Income taxes payable                               45,500        44,000

Total current liabilities                             212,500      196,400

Bonds payable                                        230,000      210,000

Total liabilities                                         442,500     406,400

Stockholders’ equity

Common stock ($5 par)                        290,000     300,000

Retained earnings                                  313,400      165,400

Total stockholders’ equity                    603,400     465,400

Total liabilities and

  stockholders’ equity                     $1,045,900    $871,800

Net cash provided by operating activities for 2017 = $251,000

Capital expenditures = $135,000,

2017 Ratios:

(a) Earnings per share = $207,000 ($ /58,000 shares) = $3.57

(b) Return on common stockholders’ equity = $207,000/$603,400 * 100 = 34.31%

(c) Return on assets = $207,000/$1,045,900 * 100 = 19.79%

(d) Current ratio = $386,900/212,500 = 1.82

Average Receivable = ($124,800 + 109,800)/2 = $117,300

(e) Accounts receivable turnover = Net Sales/Average Receivable

= $1,897,540/$117,300 = 16.18 times

(f) Average collection period = 365 Days /Average Receivable Turnover ratio. = 365/16.18 = 22.56 days

Average Inventory = ($128,000 + 117,500)/2 = $122,750

(g) Inventory turnover = Cost of goods sold/Average Inventory = $1,065,540/122,750 = 8.68 times

(h) Days in inventory = 365/8.68 = 42.05 days

(i) Times interest earned = Earnings before interest & taxes / Tax expense = $325,000/$94,000 = 3.46 times

(j) Asset turnover = Net Sales/Assets = $1,897,540/$1,045,900 = 1.81  

(k) Debt to assets ratio = Total Debt/Total Assets =  $442,500/$1,045,900 * 100 = 42.31%

(l) Free cash flow = Cash from Operations - Capital Expenditures = $251,000 - $135,000 = $116,000

8 0
2 years ago
Because Toyota's investment eventually increases the level of R&D spending for his given level of sales revenue what would t
dsp73

Available Options Are:

a. Increasing ROIC by increasing return on sales

b. Decreasing ROIC by increasing return on sales

c. Decreasing ROIC by decreasing return on sales

d. Increasing ROIC by decreasing return on sales

Answer:

Option C. Decreasing ROIC by decreasing return on sales

Explanation:

The return on sales would be reduced as the research expenses have increased substantially. The implications of increased research expenses on the ROIC can be understood by analyzing the ROIC formula which is given as under:

ROCI  =  Operating Income (1 - Tax Rate) / Book Value of Invested Capital

As revenue expenditure (Research and Development expenses) of the company has increased, this would decrease the operating income of the company which means that the numerator would be decreased and as a result the ROIC would decrease.

6 0
3 years ago
Blossom Corporation had income from continuing operations of $10,895,300 in 2020. During 2020, it disposed of its restaurant div
pantera1 [17]

Answer and Explanation:

The preparation of the partial income statement is presented below:

                                     Blossom Corporation

                                    Income Statement (Partial)

                                          For the Year 2020

Particulars                                                            Amount (in $)

Income from continuing operations                     10,895,300

Income from discontinued operations:  

Less:

Loss from disposal of Restaurant net of tax                 -194,400  

Loss from the operation of discontinued                     -321,800  

Total expense                                                                -516,200

Net income                                                                 10,379,100

Earning per share  

Income from continued operations (10,895,300 ÷10,000,000)  $1.09

Loss from discontinued operations (516,200 ÷ 10,000,000)      ($0.05)

Earning per share  $1.04

8 0
3 years ago
Explain services offered by insurance companies
Rus_ich [418]
Insurance products & services
Business Insurance. ...
Professional Indemnity. ...
Directors & Officers / Management Liability Insurance. ...
Property Insurance. ...
Motor Insurance / Commercial / Heavy Motor Insurance. ...
Home & Contents Insurance. ...
Cyber Insurance. ...
Business Interruption Insurance.
4 0
2 years ago
Which of the following costs is often important in decision making, but is omitted from conventional accounting records? A. Fixe
-Dominant- [34]

The correct option is B - Opportunity Cost

<u>Explanation:</u>

Generally, an opportunity cost is the benefit that you gave up when you pass on that option in favor of another option. For instance, by choosing to purchase furniture instead of taking a vacation comes at the cost of not experiencing the relaxation and fun associated with a vacation. All options have opportunity costs (getting married instead of staying single, investing in school instead of retirement, etc).

Everyone should know that opportunity cost is a very important concept that doesn’t just have its application in economics; you can apply it to all aspects of your daily life. Whether you’re cooking, eating, playing soccer, going to the movies, or hitting the gym, so long as you’re breathing, evaluating the choices you’re presented with is an inevitability, whether conscious of it or not.

8 0
3 years ago
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