Answer:
(a) 62%
(b) 3.83 times
(c) Yes
Explanation:
(a) Ellie's debt ratio:
= Total Debt ÷ Total assets
= $39 million ÷ $63 million
= 0.62 or 62%
(b) Ellie's times interest earned ratio:
= Interest ÷ EBIT
= $23 million ÷ $6 million
= 3.83 times
(c) Yes, it has enough times interest ratio.
If Interest expenses increased to $7 Million, then
Company could easily raise more debt to finance additional funding needs.
According to a company's retained earning statement, it did not distribute a dividend to shareholders last year. A potential investor might draw the conclusion from this that management might be concentrating on a growth strategy.
<h3>Enlist the types of dividend.</h3>
In general, a dividend is viewed as a cash payment made to the owners of firm stock.
- Of all the dividend forms, cash dividends are by far the most prevalent. The board of directors decides to pay a certain dividend amount in cash to shareholders who held the company's stock on the day of declaration.
- A stock dividend is the free distribution of common shares by a firm to its common shareholders.
- Scrip dividends, which are effectively promissory notes (which may or may not include interest) to pay shareholders at a future date, are sometimes issued by companies that may not have enough cash on hand to pay dividends in the near future. A note payable is created by this dividend.
- A liquidation dividend is declared when the board of directors wants to return the capital that shareholders initially invested as a dividend. This action could signal that the company will eventually close.
- An organization may choose to distribute a non-cash dividend to investors rather than paying out in cash or stock. Record this distribution at the assets that were distributed's fair market value. The fair market value of the assets is probably going to differ significantly from their book value, thus the corporation will probably record the difference as a gain or loss. This accounting rule may occasionally cause a company to purposefully pay property dividends in an effort to change its reported and/or taxed income.
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Answer:
Both increases
Explanation:
Suppose a person initially produces and sell some amount of milkshakes with the available resources.
But, if he will be able to produce and sell more quantity of milkshakes with the same level of resources then this will indicates that there is a rise in the productivity of this person and if the number of milkshakes sold increases then as a result profits increases at a same price level.
For Example:
Case 1:
Initially,
Person producing and selling = 20 units of milkshakes at a selling price of $10 each and cost of inputs used in the production = $50
Therefore, Profits = Total revenue - Total cost
= (20 units × $10 each) - $50
= $200 - $50
= $150
Case 2:
Now, we assumed that there is an increase in the productivity of this person. Cost of production and selling price of each milkshake remains the same.
Person producing and selling = 40 units of milkshakes at a selling price of $10 each and cost of inputs used in the production = $50
Therefore, Profits = Total revenue - Total cost
= (40 units × $10 each) - $50
= $400 - $50
= $350
Hence, there is an increase in the profits from $150 to $350.
