Luis works as a marketing manager for a consumer products company. He feels strongly about the product lines he manages and is d
1 answer:
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Answer:
5.47%
Explanation:
The computation of yield to maturity is shown in the attachment:
Given that
FV = $1000
PV = ($980)
PMT = 5% ÷ 2 × 1,000 = $25
Number of years = 5 years × 2 = 10 Years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying the above formula, the yield to maturity is
= 2.73 × 2
= 5.46%
Therefore with the help of spreadsheets (as attached), we could explain in a better manner.
Answer:
(a) Current ratio = 2.746
(b) Acid-test ratio = 1.423
(c) Debt to assets ratio = 47.48%
(d) Return on assets = 6.15%
Explanation:
For Balance Sheet, pleased see attached file.
Current Ratio = Current Asset / Current Liabilities
Current Ratio = 212,800 / 77,500
Current Ratio = 2.746
Acid-Test Ratio = (Current Assets – Inventories) / Current Liabilities
Acid-Test Ratio = (212,800 – 102,500) / 77,500
Acid-Test Ratio = 1.423
Debt to Asset ratio = (Total Liabilities / Total Assets)*100
Debt to Asset ratio = (205,500 / 432,800)*100
Debt to Asset ratio = 47.48%
ROA = (Net Income / Total Assets)*100
ROA = (26,600 / 432,800)*100
ROA = 6.15%
The Current Ratio is a liquidity measure that shows the ratio between current asset and current liabilities. It tells how many dollars of the current asset are per dollar of current debts, that gives an idea of the company`s ability to perform its debts.
The Quick Ratio is also a liquidity indicator, but using its most liquid assets, to pay its current liabilities at maturity. The inventory, although it is a current asset, is not considered, since it cannot be converted into cash in a very short term.
The difference between the Quick Ratio and the Current Ratio, implies that while both are measures of the company's ability to pay its debts, the quick ratio also tells how much the company depends on its inventory to get that objective.
The Debt to Assets ratio is a financial ratio that shows how much of a company assets is owed to its creditors.
ROA is a financial indicator that gives an idea as to how efficient a company's management is at using its assets to generate earnings, by determining how profitable a company is relative to its total assets.
