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Hatshy [7]
3 years ago
5

Answer following question with true or false and explain.A firm's profit margin is 5%, its debt/assets ratio is 56%, and its div

idend payout ratio is 40%. If the firm is operating at less than full capacity, then sales could increase to some extent without the need for external funds, but if it is operating at full capacity with respect to all assets, including fixed assets, then any positive growth in sales will require some external financing.
Business
1 answer:
maria [59]3 years ago
8 0

Answer:

False

Explanation:

As a company's sales level increases, its current assets will increase, e.g. cash, inventories, accounts receivables increase. generally, also the fixed assets increase, specially if the firm was previous producing at full capacity even before total sales increased. But as sales increase, not only do the company's assets increase, its current liabilities generally increase also, and its profits should increase. In this case, 60% of the company's profits are reinvested in the company, and the liabilities represent more than half of the total assets. Therefore, it is possible that the company needs external financing, but it is also possible that it doesn't. You cannot assume that the company will necessarily need external financing, because retained earnings  and the increase in current liabilities might be enough to finance the company's growth in sales.

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Amelia started an online jewelry business. She is the only owner. This is an example
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limited liability company

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3 years ago
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Two primary forms you could use would be 1. Birth certificate and 2. Social security card.
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3 years ago
Ratio Calculations Assume the following relationships for the Caulder Corp.: Sales/Total assets 2.2x Return on assets (ROA) 5% R
Valentin [98]

Answer:

2.27% ; 61.54%

Explanation:

Given that,

Sales/Total assets = 2.2x

Return on assets (ROA) = 5%

Return on equity (ROE) = 13%

Therefore,

Return on assets = Profit margin × Assets turnover

0.05 = Profit margin × 2.2

Profit margin = 0.05 ÷ 2.2

Profit margin = 0.0227 or 2.27%

Percent of total assets is from equity:

= Return on assets ÷ Return on equity

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7 0
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James Sebenius, in his Harvard Business Review article: Six Habits of Merely Effective Negotiators, identifies six mistakes that
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Answer:

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3 years ago
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