Average profit margin and average total asset

Assignment Help Financial Management
Reference no: EM131047702

ABC corporation has a below average profit margin and a below average total asset turnover, yet their VP of Accounting claims the firm's ROE is above average! Which of the following is correct?

their ROA is above average

their DSO is below average

their debt ratio is above average

their bonds are AAA rated

the VP of Accounting is clinically insane and does not even know the definition of ROE

Reference no: EM131047702

Questions Cloud

Describe use case dependency for making an account transfer : Describe (in a one to two page narrative) a use case dependency for making an account transfer. Illustrate this use case with Visio or a similar product.
Decides to install a fuel storage system : Mr. Daniel Colbert decides to install a fuel storage system for his farm that will save him an estimated 6.5 cents/gallon on his fuel cost. He uses an estimated 20,000 gallons/year on his farm. Initial cost of the system is $10,000 and the annual mai..
Identify types of input control and explain function of each : Identify four types of input control and explain the function of each. Provide an example of a data integrity error that could occur if each of these types of input control were not in place.
An example of political risk : Which of the following is not an example of political risk?
Average profit margin and average total asset : ABC corporation has a below average profit margin and a below average total asset turnover, yet their VP of Accounting claims the firm's ROE is above average! Which of the following is correct?
Combined communications is new firm in rapidly growing : Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 21 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. The company just paid ..
What is the current price of the firms stock : Dartsch Corporation just paid a dividend of euro 1.45. Dartsch is expected to increase its dividend by 12 percent for the next five years, thereafter the firm's dividends are expected to grow at a more modest rate of 4 percent indefinitely. If the re..
Create a gantt chart illustrating the project tasks : Create a Gantt chart illustrating the project tasks. Create a system diagram illustrating the equipment and connections required for this project (use Microsoft Visio or a similar software package).
Most ratios are difficult to interpret in isolation : Most ratios are difficult to interpret in isolation, but which of the following is almost certainly Bad News, especially if the general economy is in excellent condition?

Reviews

Write a Review

Financial Management Questions & Answers

  Employer-sponsored retirement plan includes a designated

If an employer-sponsored retirement plan includes a designated Roth account option, which of the following provisions is NOT mandatory?

  The bond is treated as an original-issue discount bond

A newly issued 10-year maturity, 4% coupon bond making annual coupon payments is sold to the public at a price of $860. The bond will not be sold at the end of the year. The bond is treated as an original-issue discount bond. Calculate the constant y..

  Finds it difficult to obtain additional credit

A corporation can have so much financial leverage that it finds it difficult to obtain additional credit. To reduce this problem a corporation may lease, rather than buy assets. This "off balance sheet financing" makes the corporation's financial pos..

  Assume that the bank pays me an interest rate

Uncle Tim gave me $100 today for my birthday. He also promised to give me another $100 each for my next two birthdays. If I deposit all the money I receive from my uncle Tim on the day it is given to me at 5% how much will I have at the end of three ..

  Used as the initial cash flow for this building project

Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $690,000. The lot was recently appraised at $747,000. At the time of the purchase, the company spent $35,000 to grade the lot and another $4,700 to build a small buildi..

  What should current rate be on two year treasury securities

One-year Treasury bills currently earn 3.85 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 4.05 percent. The liquidity premium on 2-year securities is 0.10 percent. If the liquidity theory is correct, what sho..

  Compute the npv of the project if the tax rate

The investment of $400 can be depreciated to zero book value over 10 years. EBITDA in year 1 is equal to $100, and from there on is expected to grow at 5% per year, every year, forever.  Compute the NPV of the project if the tax rate is 0% per year. ..

  Short-term financing issues

What are the ways a firm can obtain short-term financing? Explain.

  Homeowner sells the house and pays off remaining principal

A homeowner takes a 15-year fixed-rate mortgage for $130,000 at 7.5 percent. After nine years, the homeowner sells the house and pays off the remaining principal. How much is the principal payment?

  What complications do class action suits present when

case analyses select two court cases from different chapters from the list below and respond in writing to the case

  What annual interest rate must they earn to reach their goal

Finding the required interest rate Your parents will retire in 28 years. They currently have $280,000, and they think they will need $2,150,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any ..

  Before-tax cost of debt and after-tax cost of debt

The _________________ (before-tax cost of debt, after-tax cost of debt) is the interest rate that a firm pays on any new debt financing. Revive Co. can borrow at any interest rate of 12.5% for a period of eight years. its marginal federal-plus state ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd