Calculate the acid test ratio, Financial Management

Assignment Help:

FIXED ASSETS                          200 000                       LONG TERM LIABILITIES

CURRENT ASSETS CASH             40 000                       LOAN                                    210 000

MARKETABLE SECUR                  50 000

ACCOUNTS RECEIVABLE             35 000                       CURRENT LIABILITIES

INVENTORY                             20 000

PREPAID EXPENSES                    5 000                       WAGES PAYABLE                50 000

TOTAL CURRENT ASSETS           150 000                     ACCOUNTS PAYABLE         50 000

                                                                             NOTES PAYABLE                 40 000

TOTAL ASSETS                               350  000                      TOTAL LIABILITIES           350 000

A) Calculate the current ratio for the Antoine Hotel

B) Calculate the acid test ratio for Antoine Hotel.

C) Comment on the above ratios from a lender and shareholder perspective

D) Calculate the Asset turnover ratio and Fixed Asset turnover ratio and comment on reason for improvement in Fixed Asset Turnover ratio over Asset turnover ratio.

E) Calculate Net profit Margin

F) Calculate return on assets for Antoine Hotel using DuPont Analysis

G) The final question will test your brains a bit but remember working capital is current assets less current liabilities. Therefore describe the effects on working capital under the following scenarios:

      1) Antoine Hotel decides to issue common stock

      2) A restaurant generates revenue on account receivables

      3) Antoine Hotel gets a long term loan


Related Discussions:- Calculate the acid test ratio

Negotiation with bidders, N egotiation You can also negotiate with the...

N egotiation You can also negotiate with the bidders based on the requirements as mentioned below. You can negotiate only with the lowest evaluated responsive and qualified

Brigham, how do legal consideration affect a firms credit policy

how do legal consideration affect a firms credit policy

Cost of capital, The Nu-Nu Brothers Inc. (NNBI) has the following capital s...

The Nu-Nu Brothers Inc. (NNBI) has the following capital structure, which it considers to be optional: Debt 25% Preferred Stock 15% Common Equity 60% NNBI''''s expected net income

Expansion financing, The securing of the working capital needed for the sup...

The securing of the working capital needed for the support of raises in accounts receivable and inventory related with an organizations initial expansion time.

Explain about the international finance, Explain about the International Fi...

Explain about the International Finance When money crosses international boundaries businesses,individualsand governments should deal with special kinds of problems. Every c

Define futures positions closed out through reversing trade, Why are most f...

Why are most futures positions closed out through a reversing trade rather than held to delivery? Answer:  In forward markets, almost 90% of all contracts that are basically es

Show market risk in systematic risks, Market risk as that portion of total ...

Market risk as that portion of total variability of return caused by the alternating Forces of bull and bear markets. When the security index moves upward haltingly for a signifi

Explain the political events in a host country, Discuss the different ways ...

Discuss the different ways political events in a host country may affect local operations of an MNC. Answer:  The answer can be organized based on the three types of political ri

Net present value of the Lease, how to calculate the net present value when...

how to calculate the net present value when there is company tax rate and rate of return assume that lease is for 2 years payable at the begining of the yr, at the end of two yrs t

What is creative accounting, What is Creative accounting Creative accou...

What is Creative accounting Creative accounting (also termed as aggressive accounting or earnings management) distorts financial analysis of company accounts. Creative accounti

Write Your Message!

Captcha
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