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

What is translation risk, Q. What is Translation risk? This risk occurs...

Q. What is Translation risk? This risk occurs on consolidation of financial statements prior to reporting financial results and for this reason is as well known as accounting e

Modified duration versus effective duration, Modified duration is use...

Modified duration is used to determine the percentage change in the bond's prices for a 100 basis point (1%) change in the yield. The underlying assumption is tha

Determine the proportion of debt and equity, Q. Determine the proportion of...

Q. Determine the proportion of debt and equity? Financing Decision: - This function is related to increasing of finance from different sources. For this reason the financial ma

Increased common stock cash dividend signal to stock holder, Do you believe...

Do you believe an increased common stock cash dividend can send a signal to the common stockholders?  If so, what signal might it send? An enhance in cash dividends is often se

Leverage, What is the importance of leverage in business management of a sm...

What is the importance of leverage in business management of a small scale company

Accounting pricniple, The salaries paid in 2004 is Rs.500000; salaries outs...

The salaries paid in 2004 is Rs.500000; salaries outstanding Rs.20000; salaries paid in advance for 2001 is Rs.30000. What is the actual salary expenditure for 2004?

Show objections against profit maximization, Q. Show objections against pro...

Q. Show objections against profit maximization? 1) Profit cannot be ascertained well in advance to express the. Probability of return as future is Uncertain. It is not at all p

Illustrate the operating leverage, Q. Illustrate the Operating Leverage? ...

Q. Illustrate the Operating Leverage? Operating Leverage: - The operating leverage perhaps defined as the tendency of the operating profit to differ disproportional with sales.

Putable bonds, Putable bonds can be redeemed prior to maturity at the initi...

Putable bonds can be redeemed prior to maturity at the initiative of the bondholder. These bonds are more advantageous to the investors as they get an opportunity to re

Outline the objectives of alm, You are a member of the ALM Committee (ALCO)...

You are a member of the ALM Committee (ALCO) of ANZ Bank. A visiting member has some queries relating to the general framework of the ALM and interest rate risk impact on the incom

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