Return on equity measures the company's profitability by measuring how much profit a company generates comparing with the money shareholders have invested. Return on Equity = Net Income available to common stockholders common stockholder Equity ANON= HAS DEFICIT ULTA= 26% REVLON= HAS DEFICIT 4. Efficiency Ratios The efficiency ratio is used to measure how the company uses its assets and liabilities internally, these ratios to measure the performance in short term. • Accounts Receivable Turnover This ratio used to measure the firm's effectiveness in extending credit and in collecting debts. The receivables turnover ratio is an activity ratio measuring how successfully a In collecting its AR during the year, if the company has AR turnover 2 that means the AR turned over two times during the year.
• Income statement The income statement reports the profit of the company during a given accounting period. Companies can determine both the gross profit and net profit from this information. Gross profit is the amount of money from the sale going to the cost of goods sold. Net income indicates what portion of sales
Assignment 2: Operations Decision Sadrina Clayton Dr. Camille Castorina ECON 550 Managerial Economics & Globalization February 7, 2018 Outline a plan that will assess the effectiveness of the market structure for the company’s operations. A comprehensive assessment is the review of a company’s market structure for the company’s operation and ways to determine its effectiveness. “A market structure analysis can illuminate the financial reports by identifying the company’s competitive position within the industry, brand strengths (and weaknesses), and highlight dimensions of value not captured by a balance sheet” (McMann & Randolph 2011). The completion of an assessment by the company of the customers’ wants and needs allow the company
Market Capitalization Methods (MCM) – find the issue between a company’s market capitalization and its stockholders’ equity as the value of its intellectual capital or virtually assets. 3. Return on Assets Methods (ROA) average pre-tax benefits of a company and divide them by the company's average tangible assets. the end is a company ROA that is then compared with the industry average. The difference is multiplied by the average tangible assets of the company to calculate the average annual income from intangible assets.
According to the textbook, we will use the economic order quality (EOQ) calculation because it looks at " the lot size that minimizes total annual inventory holding and order costs" (Krajewski, Malhotra, & Ritzman, 2013, p. 327). Also, we will look at the cost comparisons between the continuous review system with the one that is still in use. The goal is to create a better inventory control system so that Parts Emporium can cut their lost sales because of back orders, which will improve customer satisfaction. Question # 1 EG151 Exhaust Gasket New Plan of Action! Ms. McCaskey needs to estimate the annual demand with variability in the demand during the lead time for this first item.
Financial ratio analysis helps management (1) maintain sufficient working capital to support operations; (2) project how changes in sales, costs, prices and so on will affect capital needs and profits; (3) analyze management performance; and (4) measure the profitability of company units, products and departments. From a management perspective, the rationale for use of financial ratio analysis is that by expressing several figures from financial statements as ratios, information will be revealed that is missed when the individual numbers are observed. The theory is that managers can then use this information to improve the efficiency and profitability of their operation. Associated with this theory is the implicit assumption that information from ratio analysis, especially trend analysis, enables management to foresee and possibly avoid business failure (Thomas III and Evanson, 2006). Several practitioner-oriented publications suggest that financial ratios do not vary with firm size within an industry (Westwick 1987 and Centre for Interfirm Comparison 1977).
And these ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period. This measures how many times product is sold during a period. Table of COGS and Average stock 4.13 In cr. Particular YEAR 2010-11 YEAR 2011-12 YEAR 2012-13 YEAR 2013-14 COGS 2610000000 2140000000 3580000000 3690000000 Average Stock 113000000 92600000 176000000 210000000 Stock Turnover Ratio 23.03 23.15 20.31 17.54 Sources of data collection are Annual report and balance sheet Chart of COGS and average stock 4.20 Chart of stock turnover ratio 4.21 Interpretation RCDF stock turnover ratio was 2010-11 23.03 and 2011-12 was 23.15 that are good that ratio shows RCDF have proper control on stock. RCDF have proper management on average inventory and maintain cost of goods sold.
MANAGERIAL ECONIMICS ASSIGNMENT SUBMITTED TO PROFESSOR AMIT SHARMA Answer 1 (a) Accounting costs are the actual outflows or expenses incurred by a firm which are recorded in its accounting statements. So in this case the accounting costs will be $200000. (b) Opportunity cost is the cost associated with choosing one alternative in place of the other we can also say that opportunity cost is the cost of making a decision. So in this case the opportunity cost is $35000 (c) In order to make positive accounting profits she should earn more than $200000 per annum. And more than $235000 per annum to earn positive economic profits.
It can be maintained whether in term of financial capital or physical capital. Financial capital is defined as the money, credit or any forms of funding that company use to invest in their businesses. They should stop using the funds to pay themselves, increase dividends or lower prices to produce greater gains in future. Financial capital is used to transform the existing business into something better and more profitable. (Amadeo, 2016) https://www.thebalance.com/what-is-financial-capital-3305825 If the profit measurement is done by maintaining the financial capital, the profit is the excess amount after deducting the cash amount used in acquiring the item from cash amount obtained from selling the
A STUDY ON COMPARATIVE FINANCIAL PERFORMANCE ANALYSIS OF FORCE MOTOR LIMITED *Dr.M.Ravichandran** M.Venkata Subramanian ABSTRACT Financial analysis referred to financial statement analysis or accounting analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project. The main idea behind this study is to analyze the financial operating position of the company. This research is done with help of secondary data which is gathered from the annual report of the company. The financial performance can be measured by using various financial tools such as profitability ratio, solvency ratio, comparative statement, etc. Based on the analysis, findings have been arrived that the company has got enough