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A firm has a times interest earned ratio of 2 .what does this mean?
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How many times the word firm in the bible?
The word 'firm' appears eight (8) times in the KJV Bible.
How many times is stand firm used or made reference to in the ESV Bible?
13 times, and 'standing firm' is used an additional two times.
How many times does the word stand firm appear in the bible?
The phrase "stand firm" does not appear anywhere in the KJV bible. It appears 22 times in the NIV bible.
How many times -stand firm in the bible?
In the King James version the phrase - stand firm - does not appear at all It may appear in other versions/translations
Solve for debt equity ratio with debt ratio of 43?
For a company, the debt ratio indicates the relationship between capital supplied by outsiders and capital supplied by shareholders. Often the debt ratio is computed as total debt (both current and long-term) divided by total assets. Thus if a company has $50,000 in debt and assets of $100,000, its debt ratio is 50%. The debt ratio is also calculated as total debt/shareholders' equity, long-term debt/shareholders' equity, and in other ways. However computed, the debt ratio provides insight into the firm's capital structure and will vary across industries. A low debt ratio isn't necessarily best: If a company can earn a greater return on debt than its cost, the firm should borrow more and raise its debt ratio -- provided the debt burden won't be crushing when business slows. Turning to consumers, the debt ratio is often shorthand for the "debt to income" ratio, i.e., an individual's monthly minimum debt payments divided by monthly gross income. The debt ratio is monitored by credit card companies and determines the consumer's ability to obtain additional credit
If a firm has both interest expense and lease payments would times interest earned be smaller than fixed charge coverage?
times interest earned be smaller than fixed charge coverage
What advantage does the fixed charge coverage ratio offer over simply using times interest earned?
The fixed charge coverage ratio measures the firm's ability to meet all fixed obligations rather than interest payments alone, on the assumption that failure to meet any financial obligation will endanger the position of the firm
How do you calculate debt service coverage ratio of a firm?
Debt Service Coverage Ratio = Interest payable on debt/Net Profit
If the firm's sales revenue income exceeds its expenses the firm has earned a profit?
If a firm's sales revenue exceeds its expenses, the firm has earned a profit.
What is ideal quick ratio of a firm?
Quick ratio means
A firm that is motivated by self interest should use how much input?
A firm that is motivated by self interest should:
When evaluating the operating efficiency of a firm's managers What ratio would you look at?
When evaluating the operating efficiency of a firm's managers, you would look at the Asset Evaluation Ratio.
A firm with earnings per share of 5 and a price-earnings ratio of 15 will have a stock price of?
Just use 5 times 15. $75.
Which term refers to the cost of a firm incurs for capital goods?
Interest
What is the difference between dividends and interest expense?
Interest Expense is usually calculated by (Carrying Value of Liability*Yield Rate * Time). Carrying Value is the actual present value of the liability (including discounts earned, etc) Interest Expense is the money that actually goes out of the firm. Interest Paid is calculated by (Face Value of Liability*Interest Rate * Time). Interest Paid is the fair-value of dues from the firm, but is not the actual value of the liability. Interest Expense is the amount reflected in the books of the firm, and is usually higher than Interest Paid. This is because Interest Expense often includes the cost of discount amortization(this is necessary when the bond/other liability was gained at a discount. The amortization is worked into the formula above, and hence gives an amount higher than interest paid. This gives the total interest expensed by the Company.) Hope this helps. Cheers
If A firm that has an equity multiplier of 4.0 will have a debt ratio of?
0.75
Where are key financial ratios?
Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used:Liquidity ratiosAsset turnover ratiosFinancial leverage ratiosProfitability ratiosDividend policy ratiosLiquidity RatiosLiquidity ratios provide information about a firm's ability to meet its short-term financial obligations. They are of particular interest to those extending short-term credit to the firm. Two frequently-used liquidity ratios are the current ratio (or working capital ratio) and the quick ratio.The current ratio is the ratio of current assets to current liabilities:Current Ratio = Current Assets/Current LiabilitiesShort-term creditors prefer a high current ratio since it reduces their risk. Shareholders may prefer a lower current ratio so that more of the firm's assets are working to grow the business. Typical values for the current ratio vary by firm and industry. For example, firms in cyclical industries may maintain a higher current ratio in order to remain solvent during downturns.One drawback of the current ratio is that inventory may include many items that are difficult to liquidate quickly and that have uncertain liquidation values. The quick ratio is an alternative measure of liquidity that does not include inventory in the current assets. The quick ratio is defined as follows:Quick Ratio = (Current Assets - Inventory)/Current LiabilitiesThe current assets used in the quick ratio are cash, accounts receivable, and notes receivable. These assets essentially are current assets less inventory. The quick ratio often is referred to as the acid test.Finally, the cash ratio is the most conservative liquidity ratio. It excludes all current assets except the most liquid: cash and cash equivalents. The cash ratio is defined as follows:Cash Ratio = (Cash + Marketable Securities)/Current LiabilitiesThe cash ratio is an indication of the firm's ability to pay off its current liabilities if for some reason immediate payment were demanded.Asset Turnover RatiosAsset turnover ratios indicate of how efficiently the firm utilizes its assets. They sometimes are referred to as efficiency ratios, asset utilization ratios, or asset management ratios. Two commonly used asset turnover ratios are receivables turnover and inventory turnover.Receivables turnover is an indication of how quickly the firm collects its accounts receivables and is defined as follows:Receivables Turnover = Annual Credit Sales/Accounts ReceivableThe receivables turnover often is reported in terms of the number of days that credit sales remain in accounts receivable before they are collected. This number is known as the collection period. It is the accounts receivable balance divided by the average daily credit sales, calculated as follows:Average Collection Period = Accounts Receivable/Annual Credit Sales / 365The collection period also can be written as:Average Collection Period = 365/Receivables TurnoverAnother major asset turnover ratio is inventory turnover. It is the cost of goods sold in a time period divided by the average inventory level during that period:Inventory Turnover = Cost of Goods Sold/Average InventoryThe inventory turnover often is reported as the inventory period, which is the number of days worth of inventory on hand, calculated by dividing the inventory by the average daily cost of goods sold:Inventory Period = Average Inventory/Annual Cost of Goods Sold / 365The inventory period also can be written as:Inventory Period = 365/Inventory TurnoverOther asset turnover ratios include fixed asset turnover and total asset turnover.Financial Leverage RatiosFinancial leverage ratios provide an indication of the long-term solvency of the firm. Unlike liquidity ratios that are concerned with short-term assets and liabilities, financial leverage ratios measure the extent to which the firm is using long term debt.The debt ratio is defined as total debt divided by total assets:Debt Ratio = Total Debt/Total AssetsThe debt-to-equity ratio is total debt divided by total equity:Debt-to-Equity Ratio = Total Debt/Total EquityDebt ratios depend on the classification of long-term leases and on the classification of some items as long-term debt or equity.The times interest earned ratio indicates how well the firm's earnings can cover the interest payments on its debt. This ratio also is known as the interest coverage and is calculated as follows:Interest Coverage = EBIT/Interest Chargeswhere EBIT = Earnings Before Interest and TaxesProfitability RatiosProfitability ratios offer several different measures of the success of the firm at generating profits.The gross profit margin is a measure of the gross profit earned on sales. The gross profit margin considers the firm's cost of goods sold, but does not include other costs. It is defined as follows:Gross Profit Margin = (Sales - Cost of Goods Sold)/SalesReturn on assets is a measure of how effectively the firm's assets are being used to generate profits. It is defined as:Return on Assets = Net Income/Total AssetsReturn on equity is the bottom line measure for the shareholders, measuring the profits earned for each dollar invested in the firm's stock. Return on equity is defined as follows:Return on Equity = Net Income/Shareholder EquityDividend Policy RatiosDividend policy ratios provide insight into the dividend policy of the firm and the prospects for future growth. Two commonly used ratios are the dividend yield and payout ratio.The dividend yield is defined as follows:Dividend Yield = Dividends Per Share/Share PriceA high dividend yield does not necessarily translate into a high future rate of return. It is important to consider the prospects for continuing and increasing the dividend in the future. The dividend payout ratio is helpful in this regard, and is defined as follows:Payout Ratio = Dividends Per Share/Earnings Per Share
