Questions 4 Question 1. Consider the following information relating to three companies, which are similar to Tasty Foods Ltd Jumbo Foods Ltd Fresh Foods Ltd Natural Foods Ltd Price/EBDITA 20 19 Price/Book Value 3 4 22 22 Price/Sales 3 5 The EBDITA of Tasty Foods is 220 lacs, Book value is 275 lacs and Sales are 500 lacs. It may be assumed that the average ratios of the three companies are suitable for Tasty Foods. Estimate the value of Tasty Foods Ltd based on the above information.
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- b. Comment on each of the ratios calculated in part (a). ABOVE IS THE QUESTION THAT I NEED ANSWER, BELOW IS THE QUESTION (A) ANSWER THAT MENTIONED IN QUESTION (B) a) Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: ANSWER i) Gross Profit Margin Formula: Gross profit Margin = ( Gross profit / Net sales ) x 100 Company A : = ( 40000 / 160000 ) x 100 = 25 % Company B : = ( 60000 / 240000 ) x 100 = 25 % ii)Net Profit Margin Net profit Margin = ( Net profit / Net sales ) x 100 Company A : = ( 9000 / 160000 ) x 100 = 5.625 % Company B: = ( 18000 / 240000 ) x 100 = 7.5 % iii) Inventory Turnover Period (days) Inventory Turnover Period (days) = ( Inventory / Cost of sales ) x 365 Company A: = ( 30000 / 120000 ) x 100 = 25 % Company B: = ( 50000 / 180000 ) x 100 = 27.777 % iv) Receivables Collection Period (days) Receivables Collection Period (days) = ( Receivables / Net sales ) x 365…1. Compute the average P/E ratio of the industry. Include the ratio of all companies in the computation of industry average. 2. Assuming that Northrop's earnings is P11.50 per share, compute for the company's relative value based on the industry average P/E ratio. * 3. Assume that Grumman is the subject company and all others are comparable companies. How much must be its relative value based on the median P/BV ratio of comparable companies if its book value per share is P62? The ratio of the subject company must not be included in computing the median ratio of comparable companies. * 4. Using the the industry averages of the three ratios, would you buy Loral at its current price? (Explanation should be on the handwritten solution) * Yes No↓ #becausesneaker... HW CH 17 v2.cengagenow.com/ilrn/take... Custom Order Vertical Analysis Income statement information for Ivanoff Corporation follows: Sales Cost of goods sold Gross profit Sales Cost of goods sold Gross profit $428,000 154,080 273,920 Prepare a vertical analysis of the income statement for Ivanoff Corporation. If required, round percentage answers to the nearest whole number. Ivanoff Corporation Vertical Analysis of the Income Statement Amount Percentage $428,000 154,080 $273,920 % % 11 % +
- compute net sales, gross profit, and the gross profit ratio for each of the four seperate companies. Round gross margin ratio to one decimal place. carrier lennox trane york sales 150000 550000 38700 255700 sales discounts 5000 17500 600 4800 sales returns and allowances 20000 6000 5100 900 cost of goods sold 79750 329589 24453 126500Please take a look below at the two companies' financial ratios. Use the material your learned in the chapter to try and identify the industries these two companies operate in. You are going to be graded on the quality of your analysis and arguments (e.g. this ratio indicates that... and that ratio indicates the other,... and taken together these ratios indicate that.... (and so forth)) : Company A Company B P/E Ratio: 30 Price/Sales: 6 Price/Book Value of Equity: 7.5 Profit Margin: 20% Operating Margin: 25% Return on Assets (ROA): 6% Return On Equity (ROE): 25% Current Ratio: 3 P/E Ratio: 17 Price/Sales: 0.6 Price/Book Value of Equity: 3 Profit Margin: 3% Operating Margin: 5% Return on Assets (ROA): 7% Return On Equity (ROE): 15% Current Ratio: 1DuPont Ratio General Mills Kelloggs Return on shareholders' equity (ROE) 0.402 0.247 Return on assets (ROA) 0.070 0.073 Leverage 5.783 3.362 Return on sales (ROS) (aka Profit Margin 0.091 0.129 Asset turnover 0.765 0.569 Based on the ratio analysis, which statements are true? Indicate ALL the answers that are correct. Group of answer choices Kelloggs use their assets more effectively to generate sales. Kelloggs has better overall performance. General Mills uses more liability financing relative to equity financing. General Mills does a better job controlling their expenses relative to sales. Kelloggs uses their assets more effectively to generate net income.
- The 2024 income statement of Adrian Express reports sales of $20,310,000, cost of goods sold of $12,500,000, and net income of $1,900,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term Liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Gross profit ratio Return on assets Profit margin Asset turnover Return on equity 45% 25% 15% 6.5 35% tines 2024 2023 $800,000 $910,000 1,725,000 1,175,000 2,175,000 1,625,000 5,000,000 4,390,000 $9,700,000 $8,100,000 $2,030,000 $1,820,000 2,490,000 2,560,000 2,025,000 1,975,000 3,155,000 1,745,000 $9,700,000 $8,100,000Answer the questions based on P/E ratios per company given. Industry: Apparel Industry average P/E: AMC Entertainment Holdings, Inc. (NYSE:AMC) P/E: -4.1 Big Screen Entertainment Group, Inc. (OTCPK:BSEG) P/E: 19.92 Valiant Eagle Inc. (OTCPK:PSRU) OTCPK:PSRU P/E: 0.02 Cinemark Holdings, Inc. (NYSE:CNK) P/E: 21.41 Electronic Arts Inc. (NasdaqGS:EA) P/E: 57.12 The Movie Studio, Inc. (OTCPK:MVES) P/E: N/A at a loss The Walt Disney Company (NYSE:DIS) P/E: 88.15 Live Nation Entertainment, Inc. (NYSE:LYV) P/E: -14.42 Lions Gate Entertainment Corp. (NYSE:LGF.A) P/E: 37.34 Madison Square Garden Entertainment Corp. (NYSE:MSGE) P/E: -4.928 Which firms are investors most excited about, and which firms are investors least excited about? Are there any significant outliers present? Note the highest and lowest P/E ratios. Do these numbers surprise you? Do the P/E ratios make sense; do you see any that seem out of lineThe following information is given with respect to the ratio's of two companies Aman Ltd Roger Ltd Current Ratio 2:01 1.60:1 Quick Ratio 1.35:1 1:01 Return on Investment 15% 13% Debt Equity Ratio 2.5:1 1:01 a) Define the concepts of Current and Quick ratio’s and also, reflect on your understandingtowards the financial performance of the companies by looking to the above information? b) Define the terms- Return on Investment and Debt equity ratio and also, reflect on your understanding towards the financial performance of the companies?
- VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Secuities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 220,000 200,000 160,000 P445,000 P380,000 245,000 Operating Expenses: Fixed Assets Selling Expenses 22,000 25,000 Total…VII. Direction: Compute and interpret. The following comparative financial statements are provided by Avatar Industries. You were asked to compute the different financial ratios and provide your interpretations with regards to profitability, efficiency, liquidity and solvency of the company. Use the Answer Sheet template below to input your answer and solution. AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position For the years 2019 and 2018 Comparative Income Statement For the years 2019 and 2018 2019 2018 2019 2018 ASSETS Current Assets: Sales P200,000 P210,000 Cash & Cash Equivalent P65,000 P70,000 Sales Returns and Allowances 40,000 25,000 Accounts Receivable 40,000 35,000 Net Sales 160,000 185,000 Marketable Securities 40,000 35,000 Cost of Goods Sold 100,000 115,625 Inventory 100,000 80,000 Gross Profit 60,000 69,375 Total Current Assets 245,000 220,000 Operating Expenses: Fixed Assets 200,000 160,000 Selling Expenses 22,000 25,000 Total Assets P445,000…Compare the two companies based on their ratios. Use the last column in the template to detail how each company is doing in relation to the ratios. Explain the significance of how the company ratios compare to each other. RATIOS Ford Motor Co General Motors Co ANALYSIS Profitability Ratios (%) Gross Margin 15.01 17.9 EBITDA Margin 8.66 15.55 Operating Margin 2 3 Pre-Tax Margin 2.71 5.81 Effective Tax Rate 14.96 5.54 Financial Strength Quick Ratio 1.04 0.73 Current Ratio 1.2 0.92 LT Debt to Equity 2.8 1.88 Total Debt to Equity 7.14 5.85 Interest Coverage 4.54 14.05 Valuation Ratios Price/Earnings Ratio 4.9 35.6 Price to Sales P/S 0.2 2.2 Price to Book P/B 0.9 1.2 Free Cash Flow per Share 2.26 -6.95 Management Effectiveness (%) Return On Assets 1.43 3.6 Return On Investment 2.18 6.02 Return On Equity 10.38 21.43 Efficiency Receivable Turnover 2.5 4.74…