Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

problem1. Which of the following statements is right give an appropriate reason?

A. When one firm has a higher debt ratio than the other one, we can be convinced that the firm with the higher debt ratio will have the lower TIE ratio, as that ratio depends completely on the amount of debt a firm uses.

B. A firm’s use of debt will have no consequence on its profit margin.

C. If two firms differ only in their use of debt—that is, they have identical assets, sales, operating costs, interest rates on their debt, and tax rates--however one firm has a higher debt ratio, the firm that uses more debt will have a lower profit margin on sales and lower return on assets.

D. The debt ratio as it is basically computed makes an adjustment for the use of assets leased under operating leases, so the debt ratios of firms that lease dissimilar percentages of their assets are still comparable.

E. If two firms differ only in their use of debt—that is, they have identical assets, sales, operating costs, and tax rates--but one firm has a higher debt ratio, the firm which uses more debt will have a higher operating margin and return on assets.

problem2. Austin Financial recently announced that its net income risen sharply from the previous year, yet its net cash provided from operations declined. Which of the following could describe this performance?

A. The company’s dividend payment to common stockholders refused.

B. The company’s expenditures on fixed assets refused.

C. The company’s cost of goods sold risen.

D. The company’s depreciation expense refused.

E. The company’s interest expense rose. Companies HD and LD have the same tax rate, sales, total assets, and basic earning power. Both companies have positive net incomes. Company HD has a higher debt ratio and, hence, a higher interest expenditure.

problem3. Which of the following statements is right?

A. Company HD has lower equity multiplier.

B. Company HD has more net income.

C. Company HD pays more in taxes.

D. Company HD has a lower ROE. E. Company HD has lower times-interest-earned (TIE) ratio. The retained earnings account on the balance sheet doesn’t represent cash. Rather, it represents part of the stockholders' claim against the firm's existing assets. Put another way retained earnings are stockholders' reinvested earnings. True False

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93967

Have any Question? 


Related Questions in Financial Accounting

Assignmentbullcomplete two problems problem 1 focuses on

Assignment • Complete two problems. Problem 1 focuses on working capital and quick ratio, and Problem 2 is a comprehensive problem in which you will bring together various financial analysis measures and interpret their ...

Research the major risks for businesses that indulge in

Research the major risks for businesses that indulge in commercial applications of social networking. Also, review the readings on page 311 of your textbook about how organizations can respond to social networking proble ...

Assignmentsplit-offparentco sells street vending carts and

Assignment Split-Off ParentCo sells street vending carts and has been in business for 10 years. The subsidiary, SubCo, has been in the business of selling refrigerated vending carts for 8 years. You are a 50% partner of ...

Assessmentpurpose this assessment is designed to allow

Assessment Purpose: This assessment is designed to allow students to demonstrate a higher level of understanding of accounting standards and theoretical and philosophical approaches, as they apply to the resolution of mo ...

Module cost of capital worksheetpromptreview the questions

Module Cost of Capital Worksheet Prompt Review the questions below and use the data provided in the question to solve the calculation. As you work through each equation, think about where the data for your company maybe ...

Project part i peyton approved - budget variance reportyou

Project Part I Peyton Approved - Budget Variance Report You are a manager for Peyton Approved, a pet supplies manufacturer. This responsibility requires you to create budgets, make pricing decisions, and analyze the resu ...

1 wellplace hospital provides you with the following

1. Wellplace Hospital provides you with the following financial statements for 20X2 and 20X1: December 31 20X2 20X1 Cash $ 168 $ 211 Temporary investments 126 34 Receivables-patients, net 1,011 893 Inventory 296 315 Prep ...

1 assignmentthe following data in thousands of dollars have

1. Assignment The following data (in thousands of dollars) have been taken from the accounting records of Karmana Corporation for the just-completed year. Sales ........................................................... ...

On december 31 2009 adams corporation acquired all of the

On December 31, 2009, Adams corporation acquired all of the stock of Baker company. the fair value of Adam's shares used in the exchange was $7,500,000. At the time of acquisition, the book value of Baker's stockholder's ...

Assessmentbullfor this assessment complete the problem

Assessment • For this assessment, complete the problem below. You may use Word or Excel to complete the assessments throughout this course, but you will find Excel to be most helpful for creating spreadsheets. Tutorials ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro