(a) (b) (c) The following table shows selected items from the balance sheets and income statements...
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(a) (b) (c) The following table shows selected items from the balance sheets and income statements from SIMC Inc. for the years 20X1 and 20X2 (ended 31st December). 20X2 Item Number of Common Stocks. Common Stock Equity Earnings Available to Common Stockholders Market Price per Common Stock Ratio Price/Earnings (P/E) Ratio Market/Book (MB) Ratio (i) Copy the table below to your answer script and calculate the following ratios(to 2 decimal places): 20X1 50,000 S$1,800,000 S$200,000 S$28 (ii) Average Collection Period. 20X1 (iii) Average Payment Period. 54,000 S$1,900,000 S$215,000 S$36 (4 marks) (ii) Based on your answers in part (i), comment on the firm's performance over the two years. 20X2 For EACH of the following financial ratio, explain what the ratio means. Also discuss whether the financial manager would prefer a higher or lower ratio. (i) Average Age of Inventory. (4 marks) (3 marks) (3 marks) (3 marks) Unity Inc. is a firm with $100,000 equity capital and $150,000 debt capital. It is considering an opportunity that will provide a net operating profit after-tax (NOPAT) of $48,000. The corporate tax rate is 35%. Assume the firm's after-tax weighted average cost of capital (WACC) is 12%. Calculate the firm's Economic Value Added (EVA) and explain if the firm should accept or reject this investment opportunity. (3 marks) (a) (b) (c) The following table shows selected items from the balance sheets and income statements from SIMC Inc. for the years 20X1 and 20X2 (ended 31st December). 20X2 Item Number of Common Stocks. Common Stock Equity Earnings Available to Common Stockholders Market Price per Common Stock Ratio Price/Earnings (P/E) Ratio Market/Book (MB) Ratio (i) Copy the table below to your answer script and calculate the following ratios(to 2 decimal places): 20X1 50,000 S$1,800,000 S$200,000 S$28 (ii) Average Collection Period. 20X1 (iii) Average Payment Period. 54,000 S$1,900,000 S$215,000 S$36 (4 marks) (ii) Based on your answers in part (i), comment on the firm's performance over the two years. 20X2 For EACH of the following financial ratio, explain what the ratio means. Also discuss whether the financial manager would prefer a higher or lower ratio. (i) Average Age of Inventory. (4 marks) (3 marks) (3 marks) (3 marks) Unity Inc. is a firm with $100,000 equity capital and $150,000 debt capital. It is considering an opportunity that will provide a net operating profit after-tax (NOPAT) of $48,000. The corporate tax rate is 35%. Assume the firm's after-tax weighted average cost of capital (WACC) is 12%. Calculate the firm's Economic Value Added (EVA) and explain if the firm should accept or reject this investment opportunity. (3 marks)
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Answer rating: 100% (QA)
a i Ratio 20X1 20X2 PE 6429 5000 MB 106 108 ii Based on the ratios calculated above we can see that the PE ratio has decreased from 20X1 to 20X2 which ... View the full answer
Related Book For
Vector Mechanics for Engineers Statics and Dynamics
ISBN: 978-0073212227
8th Edition
Authors: Ferdinand Beer, E. Russell Johnston, Jr., Elliot Eisenberg, William Clausen, David Mazurek, Phillip Cornwell
Posted Date:
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