Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Entity A is significantly smaller than B in terms of revenue and would not impact LOP's revenue to the same extent. However A earns a noticeably better gross profit margin at 26% as opposite to 17% for B. A's margin is closer to LOP's and would have a less unenthusiastic impact. It maybe suggests that A has targeted a similar market to LOP, whereas B has focussed on income at the expense of margin - high volume / low margin strategy. On the other hand, it could indicate that the two entities categorize costs differently between cost of sales and other functioning costs - especially when we consider the difference in net profit margin.
Entity B earns an improved net profit at 11% and would have less impact on LOP's net margin. A's figure of 9% emerge very low with its GP at 26%. It could be that this is a minor entity and not able to take benefit of economies of scale, has high fixed costs or has poor cost control. A has high gearing and the associated finance costs are also include an impact on net profit.
The gearing of A would have a important consequence on the results of LOP as gearing is at 65% as opposed to B's gearing of 30% and LOP's 38%. However when we consider this mutually with the available lending rates, it perhaps propose that the management of A have shrewdly capitalised on low lending rates and funded the entity through exterior finance. The low gearing of B however, probably gives room to increase borrowing if necessary in the future.
The P/E ratio is a vital ratio for investors and LOP's ratio would be unfavourably affected by either acquisition. A's P/E ratio is significantly lower than B and LOP but it is difficult to make an evaluation of the applicable risk of the entities when they are judged by different markets.
The things are listed on different exchanges and so may prepare their monetary statements using different accounting standards. This will decrease the comparability of financial highlights. The ratios provided tell us nothing about the competence of the entities and the fit of management styles could be an imperative factor in a takeover situation. The entities could apply dissimilar accounting policies that could impact on the ratios, eg equity could be improve by a revaluation of non-current assets which would decrease the gearing ratio and could mask an enhance in borrowings.
How do I calculate the average return for T over a five year period?
Q. Explain career counselling process? The career counselling process should contain the following elements: a. The employee's should goals, aspirations and expectations wit
Q. Evaluate Earning Yield plus Growth in Earning Method? Earning Yield plus Growth in Earning Method: - If the EPS of a company is likely to grow at a constant rate of growth t
Explain official reserve assets and its major components. Answer: Official reserve assets are those financial assets which can be employed as international means of payments.
A floater where the coupon rate is computed as a fraction of the reference rate plus a quoted margin, are known as a de-leveraged floater. The general formula for this
1) Future cost and historical cost: financial decision is based on the future cost and not on the historical cost. The decision related to the future and hence the cost are likely
Securitization -Source of financing whereby an entity's ASSETS (characteristically mortgage loans, lease obligations or other kinds of RECEIVABLES) are placed in a special purpose
Q. What do you signify by Investment Decisions? Investment Decision: - The most significant function of financial management isn't only the procurement of external funds for th
What does it mean when we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1? Correlation
AskThink back to a time when you have worked for a supervisor who moved from one leadership style to another based on situational variables described in the Long and Spurlock (2008
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd