Calculate the debt ratio and equity multiplier

Assignment Help Financial Management
Reference no: EM131593056

Suppose you are considering an investment in Amazon.com. Amazon's balance sheet lists the following: current assets of $450,000, fixed assets of $950,000, current liabilities of $275,000, long-term liabilities of $550,000, and total shareholders' equity of $575,000. Calculate the debt ratio, equity multiplier, and debt-to-equity ratio for Amazon.com. What do these ratios suggest about the leverage of Amazon?

Reference no: EM131593056

Questions Cloud

What cultural challenges arise in implementing the program : What cultural challenges arise in implementing the program with the Board?
Eventual retirement benefit from profit sharing plan : Which of the following could impact the participant’s eventual retirement benefit from a profit sharing plan?
Recently lost lawsuit in a business dispute : Excel Precision Inc. recently lost a lawsuit in a business dispute. what decision should the company make?
What might this suggest about the inventory management : what might this suggest about the inventory management for Alcoa Inc.?
Calculate the debt ratio and equity multiplier : Calculate the debt ratio, equity multiplier, and debt-to-equity ratio for Amazon.com.
What does this suggest about their asset efficiency : Calculate the fixed asset turnover and total asset turnover for Deere & Co. What does this suggest about their asset efficiency?
Calculate the basic earnings power ratio-return on assets : Calculate the basic earnings power ratio, return on assets, and return on equity.
Prepare cash receipts schedule : Prepare a cash receipts schedule for November and December.
Step process to valuing company common equity : The authors delineate a four step process to valuing a company’s common equity. Meaning analyst will arrive at different estimates of this variable.

Reviews

Write a Review

Financial Management Questions & Answers

  Make coupon payments semiannually

Even though most corporate bonds in the United States make coupon payments semiannually,

  Value corporate bond with an annual coupon rate

At the beginning of the year, you bought a $1000 par value corporate bond with an annual coupon rate of 6 percent and a maturity date of 10 years. When you bought the bond, it had an expected yield to maturity of 8 percent. Today the bond sells for 1..

  The growth rate for the firms common stock

The growth rate for the firm’s common stock is 7%. The firm’s preferred stock is paying an annual dividend of five dollars. What is the preferred stock price if the required rate of return is 8%.

  Prepare an income statement for krugpark in good form

KrugPark produces a popular beverage called odes us which sells for $97 a case. Last year KrugPark sold 170,000 cases, each of which costs $50 to produce. KrugPark incurred selling and administrative expenses of $670,000 and depreciation expense of $..

  Total current liabilities for the same period

Total current assets for a firm at the end of 2014 were $2,550,100. Total current liabilities for the same period were $1,980,312. Net working capital at the end of 2014 was:

  Analyze the development and sale of bicycle light

Build a quantitative model to analyze the development and sale of a bicycle light.

  Approach to beat market and buy-and-hold portfolio

what will be the best approach to beat the market and the buy-and-hold portfolio? Can you predict short-term market direction?

  What is the companys net income

The Moore Corporation has operating income (EBIT) of $550,000. The company's depreciation expense is $110,000. Moore is 100% equity financed, and it faces a 35% tax rate. What is the company's net income? $ Assuming no changes to any of the Balance S..

  Worked out line of credit arrangement

You’ve worked out a line of credit arrangement that allows you to borrow up to $60 million at any time.

  How can the american parent decrease this risk

Verizon Phone Company, an American firm, is estimating their profit in Germany for next year. They are predicting sales in Germany of 200,000 units at 89 euros per unit. Their variable costs are 35 euros per unit and their fixed costs are 6,000,000 e..

  What is the basic relationship between risk and return

What is the basic relationship between risk and return and how is this reflected in the value of the firm’s stock? The cost of debt? What are the primary factors that should be considered when establishing a firm’s capital structure? What are the pri..

  Mortgage from your local bank

You plan to purchase a house for $115,000 using a 30-year mortgage from your local bank. Your bank offers you the following two options for payment:

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