1.If a company has lower ROE and a lower P/BV ratio then would it show a higher...
Question:
1.If a company has lower ROE and a lower P/BV ratio then would it show a higher sustainability ratio or g? Why or why not?
2.If one wants to find the future earnings capability of a firm then what are the ratios and factors that one must evaluate in the firm?
3.Out of the three forecasting methods (Sensitivity, Scenario and Simulation) which method do you is the best one to apply at the moment by companies to evaluate and forecast this year's financials during the Pandemic?
4.What do you mean by the "Multiples" that the P/E ratio measures on a stock market placing over the company's EPS?
5.If a company decides on shifting from FIFO method to LIFO method then what would be the impact on firm's Ending Inventory, Gross Profit and Net Profit margin?
6.If a FIFO using company decides to switch from Perpetual Inventory system to Periodic Inventory System then what might be the impact on Ending inventory and Cost of Sales, if any, and why?
7.Why does LIFO Liquidation sometimes increase the Gross profits? And is LIFO Liquidation justified in Cement companies?
8.What would be the impact of a Write-down of inventory on the Liquidity, Activity, Solvency and Profitability ratios? Illustrate for each.
9.In Inventory systems and valuations what are limitation that one can observe if following US-GAAP principles as compared to IFRS, and why?
Expert Answer:
1 If a company has lower Return on Equity ROE and a lower PricetoBook Value PBV ratio it would generally indicate a lower sustainability ratio rather than a higher one ROE measures the profitability o... View the full answer
