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A firm has sales of $6,500, net income of $500, total assets of $12,000, and total equity of $700. Interest expense is $1000. What will be the common-size statement value of the interest expense?
AIM OF FINANCE FUNCTION The fundamental aims of a modern finance function are: Acquiring enough funds when required at lower cost. Proper use of funds in projects w
Operating profit margin Operating profit margin = (PBIT / Turnover) x 100% This is the ratio of operating profit to turnover or sales. A high operating profit margin is
Question 1 Describe the functions of merchant banking and functions of financial intermediaries Question 2 What do you understand by book building and Green shoe option
Q. What do you signify by Risk Analysis in Capital Budgeting? Risk Analysis: - Risk in an investment demotes to the variability that is likely to observe between the estimated
Capital structure theory: Use the following information to answer the questions: Case I: Capital structure theory ( no tax ) Case II: Capital struct
Explain how the special drawing rights (SDR) is constructed. Also, discuss the circumstances under which the SDR was created. Answer: SDR was made by the IMF in 1970 as a new r
Goal of Shareholders wealth maximisation Shareholders' wealth maximisation goal gives us the best results since effectsof all the decisions taken by company and its managers ar
The price of the embedded option comprises two components. The first is the value of the same bond assuming it has no embedded option (option-free bond), th
Q. Describe about Profitability Index? Profitability Index OR (PI):- Second method of estimate a project through discounted cash flows is profitability index method. This metho
This is again a distinction which becomes important in case of a default. The senior bondholders have to be paid before the subordinate bondholders. This means th
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