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- Suppose the following model describes changes in Company ABC’s sales: ∆ ABCt = 0.078 - 0.095(∆ ABCt-1) The current change (first difference) in the company’s sales growth rate is 0.04. Use this information to answer the questions below. (NB: For all the questions below, give your final answers to 3 decimal places.) 1. Calculate the mean-reverting level for changes in the company’s sales growth rate. (Give your answer in decimals). 2. What is the best prediction of the next change? (Give your answer in decimals) 3. What is the prediction of the change following the next change? (Give your answer in decimals) 4. blanks. Suppose we want to compute the four-quarter moving average of Company ABC’s sales as of the beginning of the first quarter of 2022. ABCs sales in the previous four quarters were as follows: 1Q 2021, R 1,200,000; 2Q 2021, R 800,000; 3Q 2021, R 750,000; and 4Q 2021, R 1,600,000. Calculate the four-quarter moving average of sales as of the beginning of the first…You've collected the following information about Groot, Inc.: Profit margin Total asset turnover Total debt ratio Payout ratio = 4.44% = 3.50 = .25 = 29% a. What is the sustainable growth rate for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the ROA? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Sustainable growth rate b. ROA % 15.54 %Loreto Inc. has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) A. Sustainable growth rate _______% B. Internal growth rate ______%
- The Stieben Company has determined that the following will be true next year: T(ratio of total assets of sales)=1 P(net profit of margin)=5% d(dividend pay out ratio)=50% L(debt equity ratio)=1 a) What is Stieben's sustainable growth rate in sales? b)Can Stieben's actual growth rate in sales be different from its sustainable growth rate? Why or why not? c) How can Stieben change its sustainable growth?13 - 18.Does a shorter or a longer operating cycle indicate the efficiency of a business? what about for the cash conversion cycle? 19 - 22.When compared with last year, a company's inventory turnover increased. What positive situation might this reflect? 23 25.What is the incentive of management in computing efficiency ratios? 26 - 27. Total assets is 100,000. Total debt is 50,000. What is the debt-to-equity ratio? 28 29. (Average/Difficult) If the pro forna balance sheet shows that total asset increase by PHP400,000 while retaining a debt-equity ratio of .75 then: A. debt must increase by PHP300,000. B. equity must increase by the ful PHPH400,000. 920 C. debt must increase by PHP171,428. 4,012.0 18.284 0 D. equity must increase by PHP100,000. 30 – 34. What is a good capital structure? Are low debt ratios aiways favorable? 35 – 40. In starting a business, is it okay to siart with having debt during the early stages? What dictates the company's choice of leverage structure?Using the AFN formula in financial forecasting approach, Determine the following for Piano Co. given the following accounting information assuming that the firm’s profit margin remains constant and the company is at full capacity. · Sales this year is P6,000,000· Percentage increase projected for next year sales = 20%· Net income this year amounts to P600,000· Retention ratio = 50%· Accounts payable = P1,100,000· Notes payable = P180,000· Accrued expenses = P500,000· Projected excess funds available next year is determined to be P200,000 Questions: 1. Determine the spontaneous liabilities increase. 2. How much is the increase in Retained Earnings? 3. How much is the total assets?
- Loreto Inc. has the following financial ratios: asset turnover = 2.40; net profit margin (i.e., net income/sales) = 5%; payout ratio = 30%; equity/assets = 0.40. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate?If a company’s current ratio declined in a year during whichits quick ratio improved, which of the following is the mostlikely explanation?a. Inventory is increasing.b. Inventory is declining.c. Receivables are being collected more rapidly than inthe past.d. Receivables are being collected more slowly than inthe past.Loreto Incorporated has the following financial ratios: asset turnover = 2.00; net profit margin (i.e., net income/sales) = 7%; payout ratio = 30%; equity/assets = 0.60. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. a. Sustainable growth rate b. Internal growth rate 14 % %
- Ramble On Co. wishes to maintain a growth rate of 10.4 percent per year, a debt-equity ratio of 1.0, and a dividend payout ratio of 15 percent. The ratio of total assets to sales is constant at .82. What profit margin must the firm achieve? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin % 8.26Which of the following is the best example of a well-stated financial objective? A) Increase market share by 3% annually for the next 3 years. B) Gradually boost market share from 10% to 15% over the next several years. C) Boost revenues by a percentage greater than the industry average. D) Achieve lower costs than any other industry competitor. E) Increase earnings per share by 15% annually.The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends Current assets Income Statement Cash Accounts receivable Inventory Fixed assets Total assets Assets The firm $ 250,000 184,800 $ 65,200 8,600 $ 56,600 16,600 $ 40,000 $ 16,000 Balance Sheet (in $ millions) $ 221,000 Liabilities and Stockholders' Equity $ 4,000 Accounts payable Accrued wages 53,000 68,000 Accrued taxes $ 125,000 96,000 Current liabilities Notes payable Long-term debt…