You compute a real estate development company's debt ratio for years ending December 31, 2012, 2013,...
You compute a real estate development company's debt ratio for years ending December 31, 2012, 2013, and 2014 to be approximately 44%, 67%, and 90%; respectively. The average industry debt ratio is approximately 54%. Based on the debt ratio information provided would you consider this an A) Low-risk, B) normal-risk or C)High-risk investment?
Homework Answers
Answer)
My answer is high risk investment.
In general 40% of debt ratio is considered to be ideal and the lower is considered to be the better. In the given scenario, the average industry ratio is 54% which is far higher than ideal ratio. How ever in year 2012 it is below the average industry ratio and considered to be ok. But when it comes 2014 it reaches to 90% which is very high even as compared to average industry ratio and it may create solvency crisis to the organisation in the near future.
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You compute a real estate development company's debt ratio for
years ending December 31, 2012, 2013,...
0 Data Table Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014...
0 Data Table Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $ 14,146,387 $ 13,566,833 Cost of goods sold $ -8,448,925 $ -8,131,991 Selling, general, and administrative expenses $ -997,631 $ -980,045 Depreciation $ -1,498,941 $ -1,472,550 EBIT 3,200,890 $ 2,982,247 Interest expense $ -376,887 $ -355,153 Taxes $ -1,073,121 $ -998,296 Net income $ 1,750,882 S 1,628,798 Diabt aliole on the tablo ondoalost Coauto lisboard and then cixbt oliol, tha Print...
Kansai Paints Co. Statement of Retained Earnings For the year ending December 31, 2012 2012 Retained...
Kansai Paints Co. Statement of Retained Earnings For the year ending December 31, 2012 2012 Retained earnings, January 1 723,000 Add: Net income for year 245,000 Total 968,000 Deduct Dividends: On preferred stock 40,000 On common stock 45,000 Total 85,000 Retained earnings, December 31 883,000 2011 581,800 211,200 793,000 40,000 30,000 70.000 723,000 2011 Kansai Paints Co. Balance Sheet As on December 31, 2012 2012 Current Assets: Cash 175,000 Short-term investment 150,000 Accounts receivables 425,000 Inventories 720,000 Prepaid expenses 30,000...
2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabiliti...
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2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days...
2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days Accounts Receivable 1 Low ST liquidity risk high Low ST liquidity risk 0.4 Low ST liquidity risk Current Assets/ Current Liabilities (Cash+ShortTermInvestments+AccountsReceivable Current Liabilities Operating Cash Flow/0.5(Current Liabilities-2Year) 365/Accounts Receivable Turnover Ratio Accounts Receivable Turnover-Sales 0.5(Accounts Receivable-2Year) 565 Inventory lurnover Ratio Inventory Turnover Ratio Costs of Goods Sold'0.5(Inventory-2Year) 365/Accounts Payable Tumover Ratio Accounts Payable Turnover-Purchase 0.5(Accounts Payable-2Year) Purchase-Cost of Goods Sold+Ending Inventory-Beginning Inventory Days...
P18.6 The accounting records of Steven Corp., a real estate developer, indicated income before income tax of $850,000 for its year ended December 31, 2020, and of $525,000 for the year ended December 31, 2021. The following data are also available. Steve
P18.6 The accounting records of Steven Corp., a real estate developer, indicated income before income tax of $850,000 for its year ended December 31, 2020, and of $525,000 for the year ended December 31, 2021. The following data are also available.Steven Corp. pays an annual life insurance premium of $11,000 covering the top management team. The company is the named beneficiary.The carrying amount of the company's property, plant, and equipment at January 1, 2020, was $1,256,000, and the UCC at that...
1.Zebra Company reports the following figures for the years ending December 31, 2019 and 2018: 2019...
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9. If the stable developers such as HRI have a total debt-to-total assets ratio in the range of 48-55 percent, how much flexibility for future financing will HRI have if is issued at present? Cas...
9. If the stable developers such as HRI have a total
debt-to-total assets ratio in the range of 48-55 percent, how much
flexibility for future financing will HRI have if is issued at
present?
Case 31 The Debt versus Equity Financing Alternative High Rock Industries Kathleen Crawford, president and CEO of High Rock Industries, reflected upon the company's growth since its inception in 1975. That growth, indicative of the activity in land development in the mid-Atlantic region of the United...
The accounting records of Whispering Winds Corp., a real estate developer, indicated income before income tax of $856,000 for its year ended December 31, 2020, and of $560,000 for the year ended December 31, 2021. The following data are also available. 1
The accounting records of Whispering Winds Corp., a real estate developer, indicated income before income tax of $856,000 for its year ended December 31, 2020, and of $560,000 for the year ended December 31, 2021. The following data are also available.1.Whispering Winds Corp. pays an annual life insurance premium of $11,200 covering the top management team. The company is the named beneficiary.2.The carrying amount of the company’s property, plant, and equipment at January 1, 2020 was $1,250,000, and the UCC at that date was $993,000. Whispering Winds recorded...
I am need of assistance with the cells in yellow. 5.1 SAA 1/3/2017 EARTHWEAR CLOTHIERS Ratio...
I am need of assistance with the cells in yellow.
5.1 SAA 1/3/2017 EARTHWEAR CLOTHIERS Ratio Analyses December 31, 2016 December 31 2012 2013 2014 2015 2016 2016 Expected Actual (Audited) (Audited) (Audited) (Audited) (unaudited) WIB Difference Industry DITETETTCE Average (from 20461 Expected 1.641.43 .1.92.... 1.80 .1.94... 2.17 . 0.23 ... 0.07 SHORT-TERM LIQUIDITY RATIOS: Current Ratio current assets / current liabilites Quick Ratio liquid assets/ current liabilities Operating Cash Flow Ratio cash fow from operations / current liabilities 0.39...
Analyzing Debt Terms, Ylelds, Prices, and Credit Ratings Reproduced below is the debt footnote from the...
Analyzing Debt Terms, Ylelds, Prices, and Credit Ratings Reproduced below is the debt footnote from the 2011 10-K report of Dell Inc. January 28, January 29, 2010 Long-Term Debt (in millions) 2011 Notes S 401 $ 400 $400 million isued on June 10. 2009, at 3.375% due June 2012 599 S600 million issued on April 17, 2008, at 4.70% due April 2013 609 499 $500 million issued on September 7. 2010, at 1.406 due September 2013 500 500 $500 million...
0 Data Table Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $ 14,146,387 $ 13,566,833 Cost of goods sold $ -8,448,925 $ -8,131,991 Selling, general, and administrative expenses $ -997,631 $ -980,045 Depreciation $ -1,498,941 $ -1,472,550 EBIT 3,200,890 $ 2,982,247 Interest expense $ -376,887 $ -355,153 Taxes $ -1,073,121 $ -998,296 Net income $ 1,750,882 S 1,628,798 Diabt aliole on the tablo ondoalost Coauto lisboard and then cixbt oliol, tha Print...
Kansai Paints Co. Statement of Retained Earnings For the year ending December 31, 2012 2012 Retained earnings, January 1 723,000 Add: Net income for year 245,000 Total 968,000 Deduct Dividends: On preferred stock 40,000 On common stock 45,000 Total 85,000 Retained earnings, December 31 883,000 2011 581,800 211,200 793,000 40,000 30,000 70.000 723,000 2011 Kansai Paints Co. Balance Sheet As on December 31, 2012 2012 Current Assets: Cash 175,000 Short-term investment 150,000 Accounts receivables 425,000 Inventories 720,000 Prepaid expenses 30,000...
2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days Accounts Receivable 1 Low ST liquidity risk high Low ST liquidity risk 0.4 Low ST liquidity risk Current Assets/ Current Liabilities (Cash+ShortTermInvestments+AccountsReceivable Current Liabilities Operating Cash Flow/0.5(Current Liabilities-2Year) 365/Accounts Receivable Turnover Ratio Accounts Receivable Turnover-Sales 0.5(Accounts Receivable-2Year) 565 Inventory lurnover Ratio Inventory Turnover Ratio Costs of Goods Sold'0.5(Inventory-2Year) 365/Accounts Payable Tumover Ratio Accounts Payable Turnover-Purchase 0.5(Accounts Payable-2Year) Purchase-Cost of Goods Sold+Ending Inventory-Beginning Inventory Days...
2013 2014 2015 Formula Current Ratio Quick Ratio Operating Cash Flow to Average Current Liabilities Days Accounts Receivable 1 Low ST liquidity risk high Low ST liquidity risk 0.4 Low ST liquidity risk Current Assets/ Current Liabilities (Cash+ShortTermInvestments+AccountsReceivable Current Liabilities Operating Cash Flow/0.5(Current Liabilities-2Year) 365/Accounts Receivable Turnover Ratio Accounts Receivable Turnover-Sales 0.5(Accounts Receivable-2Year) 565 Inventory lurnover Ratio Inventory Turnover Ratio Costs of Goods Sold'0.5(Inventory-2Year) 365/Accounts Payable Tumover Ratio Accounts Payable Turnover-Purchase 0.5(Accounts Payable-2Year) Purchase-Cost of Goods Sold+Ending Inventory-Beginning Inventory Days...
9. If the stable developers such as HRI have a total
debt-to-total assets ratio in the range of 48-55 percent, how much
flexibility for future financing will HRI have if is issued at
present?
Case 31 The Debt versus Equity Financing Alternative High Rock Industries Kathleen Crawford, president and CEO of High Rock Industries, reflected upon the company's growth since its inception in 1975. That growth, indicative of the activity in land development in the mid-Atlantic region of the United...
I am need of assistance with the cells in yellow.
5.1 SAA 1/3/2017 EARTHWEAR CLOTHIERS Ratio Analyses December 31, 2016 December 31 2012 2013 2014 2015 2016 2016 Expected Actual (Audited) (Audited) (Audited) (Audited) (unaudited) WIB Difference Industry DITETETTCE Average (from 20461 Expected 1.641.43 .1.92.... 1.80 .1.94... 2.17 . 0.23 ... 0.07 SHORT-TERM LIQUIDITY RATIOS: Current Ratio current assets / current liabilites Quick Ratio liquid assets/ current liabilities Operating Cash Flow Ratio cash fow from operations / current liabilities 0.39...
Analyzing Debt Terms, Ylelds, Prices, and Credit Ratings Reproduced below is the debt footnote from the 2011 10-K report of Dell Inc. January 28, January 29, 2010 Long-Term Debt (in millions) 2011 Notes S 401 $ 400 $400 million isued on June 10. 2009, at 3.375% due June 2012 599 S600 million issued on April 17, 2008, at 4.70% due April 2013 609 499 $500 million issued on September 7. 2010, at 1.406 due September 2013 500 500 $500 million...
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