Securities and Exchange Commission "Commission" Action: The release sets forth certain views of the Commission regarding disclosure that should be considered by registrants. Disclosure matters addressed by the release are liquidity and capital resources including off-balance sheet arrangements; certain trading activities that include non-exchange traded contracts accounted for at fair value; and effects of transactions with related and certain other parties.
Dividend policy ratios Liquidity Ratios Liquidity ratios provide information about a firm's ability to meet its short-term financial obligations.
They are of particular interest to those extending short-term credit to the firm. Two frequently-used liquidity ratios are the current ratio or working capital ratio and the quick ratio.
The current ratio is the ratio of current assets to current liabilities: Current Ratio Current Assets Current Liabilities Short-term creditors prefer a high current ratio since it reduces their risk.
Shareholders may prefer a lower current ratio so that more of the firm's assets are working to grow the business. Typical values for the current ratio vary by firm and industry. For example, firms in cyclical industries may maintain a higher current ratio in order to remain solvent during downturns.
One drawback of the current ratio is that inventory may include many items that are difficult to liquidate quickly and that have uncertain liquidation values. The quick ratio is an alternative measure of liquidity that does not include inventory in the current assets.
The quick ratio is defined as follows: Quick Ratio Current Assets - Inventory Current Liabilities The current assets used in the quick ratio are cash, accounts receivable, and notes receivable.
These assets essentially are current assets less inventory. The quick ratio often is referred to as the acid test. Finally, the cash ratio is the most conservative liquidity ratio.
It excludes all current assets except the most liquid: The cash ratio is defined as follows: Asset Turnover Ratios Asset turnover ratios indicate of how efficiently the firm utilizes its assets. They sometimes are referred to as efficiency ratios, asset utilization ratios, or asset management ratios.
Two commonly used asset turnover ratios are receivables turnover and inventory turnover. Receivables turnover is an indication of how quickly the firm collects its accounts receivables and is defined as follows: Receivables Turnover Annual Credit Sales Accounts Receivable The receivables turnover often is reported in terms of the number of days that credit sales remain in accounts receivable before they are collected.
This number is known as the collection period. It is the accounts receivable balance divided by the average daily credit sales, calculated as follows:StudyBlue is the largest crowdsourced study library, with over million flashcards, notes and study guides from students like you. Make and share study materials, search for recommended study content from classmates, track progress, set reminders, and create custom quizzes.
AirJet Best Parts, Inc. are of similar risk and will require the same return. (5 pts) b. What is the after-tax cost of debt if the tax rate is 34%?
(5 pts) c. Explain what other methods you could have used to find the cost of debt for AirJet Best Parts Inc.(10 pts) d. Explain why you should use the YTM and not the coupon rate as the required.
Compute the cost of debt. Assume AirJet Best Parts Inc. is considering issuing new bonds. c. Explain what other methods you could have used to find the cost of debt for AirJet a. Sunk Cost b. Opportunity cost c. Erosion 6. Explain how you would conduct a scenario and sensitivity analysis of the project.
What would be some project. work, and other costly items. As of February , Bullock had been sentenced to nine years in prison following a guilty plea, and four others had been indicted. Jan 01, · This limit does not have to count premiums or billing amounts for non-network providers and other out-of-network cost-sharing, or spending for non-essential health benefits.
Use these tools and you should have little problem selecting the right car or SUV. Once you have a short list, it's time to figure out how you'll pay for the car.