In 2022, the ABC Food company has total assets of $46,690,000, cash balance of $3,875,000, sales growth of -3% (-0.03), loss indicator of 1, CFO change indicator of 0. If the manager decides to invest $325,000, does she/he overinvest or underinvest? Based on the threshold of $60,000, do you have to conduct a further investigation and why
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In 2022, the ABC Food company has total assets of $46,690,000, cash balance of $3,875,000, sales growth of -3% (-0.03), loss indicator of 1, CFO change indicator of 0. If the manager decides to invest $325,000, does she/he overinvest or underinvest? Based on the threshold of $60,000, do you have to conduct a further investigation and why?
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- You have been asked by your employers to demonstrate your knowledge in business valuation process, by analyzing the value of Best Group Savings and Loans Company (BGSLC). The company paid a dividend of GH¢ 250,000 this year. The current return to shareholders of companies in the same industry as BGSLC is 12%, although it is expected that an additional risk premium of 2% will be applicable to BGSLC, being a smaller and unquoted company. Compute the expected valuation of BGSLC, if: The current level of dividend is expected to continue into the foreseeable future The dividend is expected to grow at a rate 4% par into foreseeable future The dividend is expected to grow at a 3% rate for three years and 2% afterwardsThe CFO of AkH sp. z 0.0. is developing a financial plan for the company for the year 2022. They would like to check if the strategy, planned for year 2022, is financially viable. According to their calculations, the forecasted financial data for the year 2022 is as follows (all data given in thousands and represent the projected changes between the beginning and end of 2022): a. Revenues = 2,000 b. Operating costs (excluding depreciation) = 1,400 c. Depreciation = 100 d. Other operating costs = 100 e. Financial costs = 50 f. Opening receivables balance = 100, final balance = 200 g. Opening inventory balance = 300, final balance = 500 h. Opening account payables balance = 300, final account payables balance = 500 a. Opening cash balance = 200 j. Credit payment = 100 k. Proceeds from new issuance of shares = 100 ax. Investment expenditure = 300 %3D %3D We also know that the company pays a 19% income tax. a. Based on the given information, please develop a cash flow statement and decide…Read the scenario below and answer the questions that follow. A company is under pressure from influential shareholders to change its dividend policy. The company has always followed the residual dividend policy, but the influential shareholders feel that the company needs to change to a stable pay-out ratio policy. The company just reported earnings of R232m for the year ended 31 March 2024. The company is considering the following investment opportunities for the upcoming financial year: Investment opportunity A BUD C E Cost R72m R62m R110m R96m R48m Internal rate of return 14.28% 13.03% 15.67% 16.01% 13.79% The company's cost of capital is 13.5% and its target capital structure is represented by a debt-to-assets ratio of 40%. The company has 28m ordinary shares outstanding.
- Use your own words to answer the following questions: Write the formula for the P/E ratio and what it measures? Should you invest in a company with high P/E or low P/E? A company has the following items for the fiscal year 2020: Revenue = 10 million Net income = 4 million The company has 2 million shares of stock Stock price per share = $70 Calculate the company’s earnings per share and P/E ratioYour company seeks to take over Good Deal Company. Your company’s offer for Good Deal is $3,000,000 in cash upon signing the agreement followed by 10 annual payments of $300,000 starting one year later. The time value of money is 10%. Find the present worth of your company’s offer and perform a sensitivity analysis with a graph in excel i.e. find how sensitive the value of the present worth is to changes in the initial cash upon signing, amount of payments, their frequency and rate of return.Upon further investigation, you have found that the amount of account payables for Companies A and X at the start of the lyear is 20,000 and 30,000, respectively. Apart from that, the amount of credit purchase for Companies A and B is 250,000 and 280,000, respectively. Based on all this information, recommend on which company that gire lower risk to your company. The recommendation must be ustified by the following analysis: a) hiquidity analysis. b) Solvency analysis. c) Any other financial analysis that you think can help in making your decision. Table: Balance Sheet for Company A and Company B Assets Fixed Assets Other Non-Current Assets Account Receivables Inventory Cash 250,000 80,000 120,000 80,000 120,000 650,000 280,000 110,000 140,000 100,000 100,000 ТОTAL 730,000 Liabilities Саpital Long Term Debt Account Payables Other Current Liabilities ТОTAL 250,000 120,000 160,000 120,000 650,000 280,000 140,000 180,000 130,000 730,000
- You are a senior financial analyst of a firm based in Sydney. You have been assigned with the task of training interns who recently joined your firm on how to use the free cash flow model to estimate the value of a company. You have collected data on the following data: Year 2020 2021 2022 2023 2024 Long-term Debt ($M) 56000 57,000 57,000 58,000 60,000 Profits (SM, after tax) 22,000 28,000 26,000 32,000 35,000 Interest ($M, after tax) 1,900 1,950 2,050 2,150 2,275 Working Cap (SM) 20,000 19,000 22,000 30,000 28,000 Depreciation (SM) 36,000 37,000 38,000 38,000 40,000 Cap Spending ($M) 35,150 37,000 41,000 45,000 Cost of equity 0.10 0.11 0.09 0.11 WACC 0.12 0.13 0.13 0.12 Number of equity shares (Million) 3,000 Terminal growth rate 0.06 Using the information you have collected above, perform calculations to explain to interns as to how the following are calculated: i. Free cash flow to firm ii. Free cash to equity iii. method Value of the firm according to the free cash flow to firm…Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following:a. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.I need some explanation of a problem. I ended up with the right answer but I'm not quite sure how I did. Here is the question: Garlington Technologies Inc.'s 2019 financial statements are shown here. Suppose that in 2020 sales increase to $4.4 million and that 2020 dividends will increase to $200,000. Forecasting the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2019. The long-term bonds have an interest rate of 12%. New financing will be with a line of credit. Assume it will be added at the end of the year. Cash does not earn any interest income. Answer $98,000 Income statement for December 31, 2019 Sales $4,000,000 Operating costs 3,200,000 EBIT $800,000 Interest 120,000 Pre-tax earnings $680,000 Taxes (25%) 170,000 Net income $510,000 Dividends $190,000 Balance Sheets as of December 31, 2019…
- CoinSoft was a company that developed software to manage portfolios of cryptocurrencies. In 2021, the company's revenue was $14 million. In 2022, customers paid for $4 million in upgrades. In the same year, there were $0.5 million in downgrades and $0.8 million in reduced revenue from customers who went out of business themselves or switched to a competitor. Calculate the net dollar retention in percentage form? The correct answer is 119.3, please explain fully15) Residual Income Valuation - Grand Central Video's accountant forecasts the following Net Income for the next two years: Year 2021 $2,420,000 2022 $2,600,000 She estimates that Grand Central's Re = 12%, and its growth rate g=8%. The company does not give a dividend. If its book value is $15,000,000, what valuation does the accountant place on the company? Please choose the answer closest to your calcualtion. А. $34,287,000 В. $9,082,000 С. $21,217,000 D. $24,073,00You’ve recently learned that the company where you work is being sold for $500,000. The company’s income statement indicates current profits of $25,000, which have yet to be paid out as dividends. Assuming the company will remain a “going concern” indefinitely and that the interest rate will remain constant at 9 percent, at what constant rate does the owner believe that profits will grow? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.