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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
Answer the following question
a. Return on equity
b. Total assets turnover
c. Return on assets
d. Current ratio
e. Receivables turnover
Step by step
Solved in 4 steps
- Instructions: Kindly make an analysis about the asset management ratio (Receivable Turnover, Fixed Asset Turnover, and Total Asset turnover) of SM Investment Corporation.If a company has asset classes that include short-term and long-term investments, what criteria should they employ to determine if an asset is reported as a cash equivalent or an investment on their classified balance sheet? Examples needed and support using GAAPProperty, Plant, and Equipment (PPE) Assessment: Describe the company’s Property, Plant and Equipment section in the balance sheet relative to the total fixed assets of the company’s industry (use quantitative and qualitative summaries to support your description. Analyze the accounting treatment of Property, Plant and Equipment, including depreciation methods employed and any impairments recognized, and include a brief summary of the accounting standards and principles included in the decision (reference the Notes that inform your summary). Discuss the significance of Property, Plant And Equipment in the company’s operations and its impact on financial performance and reporting.
- For each account listed, identify the category in which it would appear on a classified balance sheet. Use the following categories: Current Assets; Long-term Investments; Property, Plant, and Equipment; Intangible Assets; Current Liabilities; Long-term Liabilities; and Owner's Equity. If the item does not belong on the classified balance sheet, put an X. Account a. Land (used n operations) b. Accumulated Depreciation-Equipment c. Reed, Capital d. Service Revenue e. Investment in Starbucks Corporation (to be held long-term) Accounts Receivable g. Equipment h. Buildings i. Notes Payable (due in 10 years) j. Unearned Revenue Cash 1. Accounts Payable m. Prepaid Rent n. Reed, Withdrawals o. Land (held for investment purposes) p. Depreciation Expense Category Current Assets Long-term Investments Property, Plant, and Equipment Intangible Assets Current Liabilities Long-term Liabilities Owner's Equity X WIf a company has asset classes that include short-term and long-term investments, what criteria should they employ to determine if an asset is reported as a cash equivalent or an investment on their classified balance sheet?Which of the following is NOT correct regarding the rate of return on assets? a. The rate of return on assets measures management’s ability to productively employ all its resources. b. The rate of return on assets measures the return on all assets used regardless of how the assets are financed. c. The rate of return on assets is a measure of profitability. d. The rate of return on assets measures the return on the investment made by the owners of the entity. is B the correct answer?
- Which of the following are classed as fixed assets? Hisham I. Debtors II. Plant and machinery II. Cash in bank IV. Buildings (owned by the company and not leased) (ii) and (iii) are fixed assets (i) and (ii) are fixed assets O All of them are classed as fixed assets O None of then are classed as fixed assets (ii) and (iv) are fixed assets Activate Wind Gata Sertion to Page 19 of 20 Previous Page Next Page 36°C 如 )圈 近19. The current assets section of the statement of financial position should include * b. patents. a. machinery. d. inventory c. goodwill. 20. Equity or debt securities held to finance future construction of additional plants should be classified on a balance sheet as * c. intangible assets. a. current assets. d. long-term investments b. property, plant, and equipment. 21. In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should generally be classified as cash inflows from * d. selling activities c. investing activities. a. operating activities. b. financing activities. 22. The statement of financial position * d. All of the choices are correct regarding the statement of financial position. c. Uses fair value for most assets and liabilities. b. Makes very limited use of judgments and estimates. a. Omits many items that are of financial value. 23. The basis for classifying assets as current or noncurrent is…For each account listed, identify the category in which it would appear on a classified balance sheet. Use the following categories: Current Assets; Long-term Investments; Property, Plant, and Equipment; Intangible Assets; Current Liabilities; Long-term Liabilities; and Owner's Equity. If the item does not belong on the classified balance sheet, put an X. Account Category а. Land (used in operations) b. Accumulated Depreciation-Equipment c. Reed, Capital d. Service Revenue е. Investment in Starbucks Corporation (to be held long-term) f. Accounts Receivable g. Equipment h. Buildings i. Notes Payable (due in 10 years) j. Unearned Revenue k. Cash I. Accounts Payable m. Prepaid Rent n. Reed, Withdrawals o. Land (held for investment purposes) p. Depreciation Expense
- Property, Plant, and Equipment (PPE) Assessment:a) Describe the company’s Property, Plant and Equipment section in the balance sheet relative to the total fixed assets of the company’s industry (use quantitative and qualitative summaries to support your description. b) Analyze the accounting treatment of Property, Plant and Equipment, including depreciation methods employed and any impairments recognized, and include a brief summary of the accounting standards and principles included in the decision (reference the Notes that inform your summary). c) Discuss the significance of Property, Plant And Equipment in the company’s operations and its impact on financial performance and reporting.Which of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.Hw would you best define an intangible asset? A. Assets that dont impact the company's valuation B. Assets with physical traits, such as property or equipment C. Assets not recorded on the Balance Sheet, such as customer loyyalty or intellectual property D. Assets that were added to the company in the most recent annual report E. Assets that depreciate at an accelerated rate