See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. Compute Mydecos
Question:
a. Compute Mydecos ROE each year from 2009 to 2013.
b. Compute Mydecos ROA each year from 2009 to 2013.
c. Which return is more volatile? Why?
Table continue
TABLE 2.5 2009-2013 Financial Statement Data and Stock Price Data for Mydeco Corp Mydeco Corp. 2009-2013 Statement of Cash Flows Net Income Depreciation & Amortization Chg. in Accounts Receivable Chg. in Inventory Chg. in Payables & Accrued Com (All data as of fiscal year end; in S million) 2009 18.0 27.3 2010 3.0 27.0 18.8 2.8 2011 2012 12.7 38.4 2013 21.7 38.6 6.3 34.3 (0.0) 2.5 4.7 47.8 (25.0) (25.0 (100.0) (75.0) 40.0) (25.0) (25.0 (100.0 (75.0) 40.0) (5.4) (2.9) 2.2 48.5 (3.3) 5.9 46.6 3.6) 6.5 54.0 Cash from Operations Capital Expenditures 50.5 Dividends Paid Sale (or purchase) of stock (5.4) (5.4) (5.4) 6.5) Cash from Financing Activities Change in Cash Mydeco Stock Price 75.0 69.6 17.4 $7.92 $3.30 $5.25 $8.71 $10.89 25.0 19.6 (8.8) (5.4) 18.1 (5.4) 20.1 (6.5) 7.5
Step by Step Answer:
a b c ROE is more volatile Mydecos debt level causes a large portion of EBIT to g...View the full answer
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
Students also viewed these Corporate Finance questions
-
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. What is Mydecos market capitalization at the end of each year? b. What is Mydecos market-to-book ratio at the...
-
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. Compute Mydecos PE ratio each year from 2009 to 2013. In which year was it the highest? b. What was Mydecos...
-
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. Was Mydeco able to improve its ROIC in 2013 relative to what it was in 2009? Table continue TABLE 2.5 2009-2013...
-
The National Health Statistics Reports dated Oct. 22, 2008, included the following information on the heights (in.) for non-Hispanic white females: a. Calculate and interpret a confidence interval at...
-
Explain conceptually the choice of strike prices when it comes to designing a call-based bull spread. Specifically, address the costs and benefits of two bull spread strategies. One strategy has the...
-
5. Nonlinear systems often find use in mathematical epidemiology, which is concerned with the study of disease transmission within a population. Let s represent the susceptible fraction of the...
-
State Hookes law.
-
A process stream flowing at 35k mol/h contains 15 mole% hydrogen and the remainder 1-butene. The stream pressure is 10.0 atm absolute, the temperature is 50C, and the velocity is 150m/min. Determine...
-
Direct labor costs Family Model Deluxe Model $72,900 $145,800 Machine hours 2,000 2,000 Setup hours 200 800 Packaging hours 50 75 The estimated overhead of $437,400 is allocated as follows: machining...
-
Childrens Best Hope (CBH) provides day care ser-vices to low income families. CBH bills the state for its services under a service contract. Billings for the first four months of 2013 are anticipated...
-
In mid-2012, United Airlines (UAL) had a market capitalization of $6.8 billion, debt of $12.4 billion, and cash of $7.3 billion. United also had annual revenues of $37.4 billion. Southwest Airlines...
-
For fiscal year 2011, Peets Coffee and Tea (PEET) had a net profit margin of 4.78%, asset turnover of 1.73, and a book equity multiplier of 1.21. a. Use this data to compute Peets ROE using the...
-
Using Excel or another software, simulate the process of flipping a non-regular coin with a probability of heads p as an input parameter.
-
Your test scores are \(78,95,87\), and 92. What score on the fifth exam will make your average score at least 80 ?
-
Find the difference quotient, \(\frac{f(x+h)-f(x)}{h}\), for the functions given in Problems 39-44. \(f(x)=5 x^{3}\)
-
Let \(P(x)\) be the number of prime numbers less than \(x\). Find a. \(P(10)\) b. \(P(-10)\) c. \(P(100)\)
-
What is your own best learning style? Do you learn best through images? Printed words? Aural sources? How might this approach to learning suit you as you enter a career as a technical communicator?
-
Find the difference quotient, \(\frac{f(x+h)-f(x)}{h}\), for the functions given in Problems 39-44. \(f(x)=x^{3}\)
-
At what angle does a diffraction grating produces a second-order maximum for light having a first- order maximum at 20.0?
-
When you weigh yourself on good old terra firma (solid ground), your weight is 142 lb. In an elevator your apparent weight is 121 lb. What are the direction and magnitude of the elevator's...
-
a) Give the probability density function of the maximum of drifted Brownian motion \(\operatorname{Max}_{t \in[0,1]}\left(B_{t}+\sigma t / 2ight)\). b) Taking \(S_{t}:=\mathrm{e}^{\sigma...
-
The Chapter Resources section of MyFinanceLab has data on Microsoft and the S&P 500 from 1986 to 2006. a. Estimate Microsofts beta using linear regression over the periods 19871991, 19921996,...
-
RiverRocks purchase of Raft Adventures (from Problem 18) will cost $100 million, but will generate cash flows that start at $15 million in one year and then grow at 4% per year forever. What is the...
-
RiverRocks realizes that it will have to raise the financing for the acquisition of Raft Adventures (described in Problem 19) by issuing new debt and equity. The firm estimates that the direct...
-
Imagine yourself at a fair playing one of the midway games. Pick a game and calculate the expected value and post your results along with how you calculated them.
-
1. What is the ratio of 2 lengths which are 25 cm and 7.5 m respectively?
-
If f(x, t) does not depend on x, then we have x' = f(t), so that x(t) = (0 to t) f(u)du. Show that, in this case, the RK4 algorithm reduces to Simpson's rule.
Study smarter with the SolutionInn App