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3 years ago

Following are summary financial statement data for Nordstrom Inc. for fiscal years ended 2014 through 2016.

Business

1 answer:

Gwar [14]3 years ago

7 0

Answer:

Nordstrom Inc.

a. Return on Assets (ROA) for the fiscal years ended 2019 and 2018:

= Net income/Total Assets

2019 = 7.15%

2018 = 5.39%

b. Profit Margin (PM) for fiscal years ended 2019 and 2018:

= Net income/Sales * 100

2019 = 3.56%

2018 = 2.82%

c. Asset Turnover (AT) for fiscal years ended 2019 and 2018:

= Total Sales / Average Assets

2019 = 1.98x

2018 = 1.94x

Explanation:

a) Data and Calculations:

$ thousands 2019 2018 2017

Sales $15,860 $15,478 $14,757

Net income 564 437 354

Total assets 7,886 8,115 7,858

Average assets 8,001 7,986

Equity 873 977 870

a. Return on Assets (ROA) for the fiscal years ended 2019 and 2018:

= Net income/Total Assets

2019 = $564/$7,886 * 100 = 7.15%

2018 = $437/$8,115 * 100 = 5.39%

b. Profit Margin (PM) for fiscal years ended 2019 and 2018:

= Net income/Sales * 100

2019 = $564/$15,860 * 100 = 3.56%

2018 = $437/$15,478 * 100 = 2.82%

c. Asset Turnover (AT) for fiscal years ended 2019 and 2018:

= Total Sales to Average Assets

2019 = $15,860/$8,001 = 1.98x

2018 = $15,478/$7,986 = 1.94x

b) Return on Assets (ROA) indicates the relative profitability of assets, which indicates the ability of management to generate earnings from the entity's assets.

The Profit Margin (PM) measures the degree to which a dollar-sales is turned into profit.

Asset Turnover (AT) measures the efficiency achieved by the entity in generating sales from its assets.

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Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can

likoan [24]

Answer:

D. Neither country could gain from trade with each other because neither one has a comparative advantage

Explanation:

Opportunity cost refers to the units sacrificed from production of one good to produce an extra unit of another good.

In the given case, the number of workers are same.

The opportunity cost for producing corn instead of oats by Cornland would be : 10/40 units of oats = 0.4 units of oats

Similarly, the opportunity cost for producing corn by Oatland = 5/ 20 = 0.4 units of oats

Similarly, the opportunity cost for producing oats by Cornland = 4 units of corn

Opportunity cost for producing oats by Oatland = 4 units of corn.

As can be seen, none of the two i.e Cornland or Oatland enjoys a comparative advantage over other since for both, the opportunity cost is the same.

Hence, neither country would gain out of trade.

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3 years ago

When there is a full forward cover with the spot rate equal to the forward rate all of the following are true EXCEPT: A. The cu

Blababa [14]

Answer:

B. The hedge is asymmetric.

Explanation:

Hedging refers to a technique or a mechanism whereby firms and individuals aim for risk reduction, arising out of uncertain and volatile business situations, which may result into a heavy loss.

For example, an exporter entering into a forward contract to eliminate or reduce the risk of arising out of a future situation wherein, future receipts denominated in a foreign currency, receivable at a future date, may be less than same receipts receivable at current spot exchange rate as on today.

Currency hedge ratio depicts the proportion of total exposure which is covered by hedge w.r.t the total exposure itself.

Asymmetrical hedge refers to covering an exposure by an opposite position wherein the chances of earning profits are higher than the losses current position can lead to. Such an hedge would be similar to covering a call option with a put option. Asymmetrical refers to being of dissimilar or non equal size. Here, it refers to the dissimilarity between prospective profits and losses.

Under a perfect hedge, the loss position in a scenario is completely covered i.e 100% by a prospective gain in other situation, with there being negative correlation between the two scenarios such as if scenario 1 yields a profit, scenario 2 would yield a loss and vice versa.

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4 years ago

Shamas famous restaurants expects to pay a common stock dividend of $1.50 per share next year (d1). dividends are expected to gr

Tpy6a [65]

The company's external equity comes from those funds raised from public issuance of shares or rights. The cost of external equity is the minimum rate of return which the shareholders supply new funds by purchasing new shares to prevent the decline of the market value of the shares. To compute the cost of external equity, we should use this formula:

Ke = (DIV 1 / Po) + g

Ke = cost of external equity

DIV 1 = dividend to be paid next year

Po = market price of share

g = growth rate

In the problem, the estimated dividend to be paid next year is $1.50. The market price is $18.50 and the growth rate is 4%.

Substituting the given to the formulas, we need to divide $1.50 by $18.50 giving us the result of 8.11% plus the growth rate; this would yield to the result of 12.11% cost of external equity.

8 0

3 years ago

Hi guys, i need urgently some help with this question

klasskru [66]

Answer:

Accounting rate of return, also known as the Average rate of return, or ARR is a financial ratio used in capital budgeting. The ratio does not take into account the concept of time value of money. ARR calculates the return, generated from net income of the proposed capital investment. The ARR is a percentage return. Say, if ARR = 7%, then it means that the project is expected to earn seven cents out of each dollar invested (yearly). If the ARR is equal to or greater than the required rate of return, the project is acceptable. If it is less than the desired rate, it should be rejected. When comparing investments, the higher the ARR, the more attractive the investment. More than half of large firms calculate ARR when appraising projects.

Explanation:

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4 0

2 years ago

Core Corporation reported current earnings and profits of $250,000. It distributed a buildingwith an adjusted basis to Core of $

Svet_ta [14]

Answer:

B. $140,000

Explanation:

An adjusted basis refers to the total cost of acquiring an asset. In include transportation, installing, commissions, and all other relevant fees. The fair market value represents the price an asset can fetch if sold in the market. It is the amount that a company will receive if it were to dispose of an asset in the market.

Shareholders will be the fair market value adjusted for the mortgage balance.

=$ 230,000 - $ 90,000

=$140,000

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4 years ago