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small pizza restaurant, founded and owned by the Martinelli sisters, would be expected to have which of the following?
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The correct answer for the given statement is D)
Small pizza restaurant should have high inventory turnover and low gross margin as by doing this they have very low inventory and sell much more quantities which is good for company and also earn more as there quantity supply is in effective manner, this will results to good reputation to the company and for future growth.
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loan agreement between a bank and a customer specified that the debt ratio could not exceed 60%. Explain the purpose of this restrictive agreement.
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State the purpose of restrictive loan agreement:
Debt ratio indicates ratio of total liabilities with respect of total assets. There is limit to have debt ratio like here its states that debt ratio should be not more than 60% which indicates that company should have maximum of $60 liabilities with respect to $ 100 of total assets.
When it increases more than this then it's not good for company and also for bank as it faces problems while receiving that amount back, so restrictive is only to avoid bankruptcy and that person easily submits its loan amount easily.
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manager decided to acquire some expensive equipment through the use of an operating lease even though a capital budgeting analysis showed that it was more profitable to buy than to lease. However, the purchase alternative would have required the issuance of some bonds. Offer some reasons that would explain the manager's choice.
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State the reason to select operating lease rather than capital lease:
By using lease as a mode of payment is better for company. As here company issues bonds for payment of some expensive products. By doing so company transfers its burden to future years and irrespective of bear at single point it will bear that for number of years and secondly by issuing bonds the company saves its flow of cash which again is good thing for company as its managing its liquidity position of a company.
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and Torrie Jones are a retired couple looking for income. They are currently rebalancing their portfolio of stocks to include more with high dividends. Fred and Torrie will be most interested in which of the following?
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high inventory turnover ratio provides evidence that a company is having problems with stockouts and disgruntled customers. Do you agree? Explain.
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after-tax cost of interest expense is used in calculating which of the following?
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Pedee Company's inventory turnover in days is 80 days. Which of the following actions could help to improve that ratio?
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examining Luke Company's current period income statement, you notice that Research and Development expenses are 62% of sales revenue. Luke has most likely provided
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measures of the ability of a company to meet its current obligations are called
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Suppose that the accounts receivable turnover ratio of a company is low when compared with other firms within its industry. How would this information be useful to the managers of a company?
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Etchey Company shows that 46% of its assets are financed by creditors. Which of the following shows this result?
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Identify two types of standards used in ratio analysis. Explain why it is desirable to use both types.1. Name the two major types of financial statement analysis discussed in this chapter.
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Fractions or percentages computed by dividing one account or line-item amount by another are called
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is horizontal analysis? Vertical analysis? Should both horizontal and vertical analyses be done? Why?
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Explain how creditors, investors, and managers can use common-size analysis as an aid in decision making.
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