Homework Answers
Answer
Option 2 Is In-correct as Average Corp has more debt financing than Superior, As Average Total Assets to Equity Ratio is 1.58 and Superior is 1.52, So lets assume total assets is 100, then
Total Assets / Equity = Financial Leverage
Equity = Total Assets / Financial Leverage
Average Equity = 63.29 ($100 / 1.58)
Superior Equity = 65.79 ($100 / 1.52)
So as we can see that superior has more equity then it has less debt.
Note: I just assumed 100 for an example to solve this.
Option C is In-correct,
Sales to Total Assets ratio explains how much sales we can produce from $1 of assets, As we can see that Sales to total assets ratio is more in in Average case, that means from $1 of Assets it can produce $3.17 whereas Superior can produce $2.87
Option D is In-correct,
We can see thet Net income margin is more in superior case as Net income margin describes how much net income is percent to sales, for example if net income margin is 5% that means net income is 5% of sales. The higher the ratio the better it is and in our case Superior has upper hand on it.
Option A is Correct,
As Superior has more return on equity but there can be many reasons it is not because of high income margin, So Option A is inconsistent with above ratios.
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Find the following financial ratios for Somolira Golf(use
year-end figures rather than average values where appropriate): (Do
not round internediate calculations and tound your answer to 2
decimal places e.g., 32.16. Enter the profitability ratios as a
percent.
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Financial statements and necessary information is above.
Find the following financial ratios for Somolira Golf(use
year-end figures rather than average values where appropriate): (Do
not round internediate calculations and tound your answer to 2
decimal places e.g., 32.16. Enter the profitability ratios as a
percent.
Some recent financial statements for Smolira Golf, Inc., follow. points eBook SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners' Equity Current assets Current...
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