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2 years ago

A company has a cash ratio of 2.3. what does this imply?

1 answer:

3 0

<span>This implies that the company has an unnecessarily large amount of cash supply. Generally cash ratio is defined as ratio of a company's total cash and cash equivalents to its current liabilities.Then cash ratio can be determined by using the formula which is (Cash + Cash equivalents) Ă· Current liabilities.If cash &cash equivalents > current liabilities,it means the company has more cash.If cash &cash equivalents= current liabilities,it means the company has enough cash to pay the liabilities..If cash &cash equivalents<current liabilities,it means company utilized its assets well to earn profits.</span>

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Melissa invests $37,000 today in a savings account that pays 4 percent interest compounded annually. She wants to know the total

MissTica

Answer:

a. N = 7, I/Y = 4, PV = -37,000

Explanation:

In financial calculator % is already written in the calculator so we have to write only number in calculator.

Option b incorrect because it has included a number with % ( 4% ) sign that we dint do usually in calculator.

Option c is incorrect because it has taken pv as positive

Option d is incorrect because it has written 4% that we don't put in calculator as well as it has inserted positive pv which is also wrong.

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3 years ago

If bread is produced by using a constant returns to scale production function, then if the: A) number of workers is doubled, twi

nekit [7.7K]

Answer: Option (C) is correct.

Explanation:

Constant returns to scale production function: When there is an increase in inputs (i.e capital and labor) as a result output increases by the same proportion.

For example: If the amounts of equipment and workers are both doubled in the production of bread then as a result the output of bread also doubled.

Suppose the capital and labor increases by 10% then as a result output also increases by 10%.

5 0

3 years ago

The use of a differentiation strategy would be expected to be LEAST effective in which of the following markets? a. Commodity go

Tema [17]

Answer:

The correct answer is letter "A": Commodity goods.

Explanation:

A differentiation strategy is an approach adopted by companies to make the goods or services they offered unique compared to their competitors. Most firms tend to use price as the main key to the difference between their products and the competitors'.

Thus, <em>the differentiation strategy is less likely to be applied in commodity goods because they are inherently unique such as oil, natural gas, precious metals or foreign currencies</em>.

3 0

2 years ago

The records of Pippins, Inc., included the following information: Net sales $ 1,000,000 Gross margin 475,000 Interest expense 50

Lelu [443]

Answer:

Times interest earned (TIE) = 7.4 times

Explanation:

The times interest earned (TIE) ratio is a measure used to analyze the company's ability to meet its debt obligations on the basis of its current income level. The TIE ratio is calculated as follows,

Times Interest Earned (TIE) = EBIT / Total Interest expense

Where,

EBIT is the earnings of the company before interest and tax

To calculate TIE, we first need to determine the EBIT. EBIT can be calculated by backward working. Thus, EBIT is:

EBIT = Net income + tax + interest expense

EBIT = 240000 + 80000 + 50000

EBIT = $370000

Times interest earned (TIE) = 370000 / 50000

Times interest earned (TIE) = 7.4 times

6 0

3 years ago

Doug's Boat Shop, Inc. reports operating income of $260,000 and interest expense of $31,200. The average common stockholder

SCORPION-xisa [38]

Answer:

1. Interest coverage ratio=8.33

2. debt stockholder ratio=0.624

3. debt ratio=0.21

Explanation:

Leverage ratio is a financial tool used to determine a company's level of debt and it's ability to handle debt without going bankrupt.

1. Consider the interest coverage ratio formula;

interest coverage ratio=operating income/interest expense

where;

operating income=$260,000

interest expense= $31,200

replacing;

interest coverage ratio=260,000/31,200=8.33

2. Consider the debt to equity ratio formula;

debt to equity ratio=debt/stockholder equity

where;

debt=interest expense=$31,200

stockholder equity= $50,000

replacing;

debt stockholder ratio=31,200/50,000=0.624

3. Consider the debt ratio formula;

debt ratio=debt/assets

where;

debt=interest expense=$31,200

average assets=(beginning asset balance+ending asset balance)/2

average assets=(115,000+180,000)/2=$147,500

replacing;

debt ratio=31,200/147,500=0.21

3 0

2 years ago

A company has a cash ratio of 2.3. what does this​ imply?

A company has a cash ratio of 2.3. what does this imply?