Why does an increase in the ratio of current assets to total assets decrease both profits and risk as measured by net working capital? How does changes in the ratio of current liabilities to total assets affect profitability and risk?

Q: why an increase in cost of debt will increase cost of capital associated with business risk and…

A: The cost of capital is the minimal rate of return that a company must earn before it may generate…

Q: a. Sales Maximization b. Asset Maximization c. Profit Maximization d. Wealth Maximization

A: Time value of money is a technique used to find the worth of money today, but that money is to be…

Q: how changes in Working Capital affect Cashflow?

A: Working capital or net working capital is equals to firm’s current assets minus current liabilities,…

Q: Which is more important from a finance perspective-net income or operating cash flow? What is the…

A: Net income is calculated in the income statement whereas and operating cash flows are calculated in…

Q: Why is the distinction between paid-in capital andretained earnings important?

A:

Q: Explain how current assets’ investment policies affect the firm’s risk and return trade-offs.

A: Current assets for a company are all those assets that are readily available for the conversion into…

Q: The flow of money or its equivalent produced by an asset dividends and interest a. investment b.…

A: An investment is defined as an asset or invested, which used in building the wealth as well as…

Q: The cost of capital includes the cost of equity, the cost of long-term debt and the cost of accounts…

A: The capital of a corporation is the amount of money or funds that a corporation uses for operating…

Q: Which TWO of the following are possible effects of rising prices upon financial statements?…

A: We have the following question: Which TWO of the following are possible effects of rising prices…

Q: What do the return on assets measure? The liquidity of a firm's current assets Management's…

A: >Ratio analysis is the study of financial statement data based on certain ratios. >ratio…

Q: hat does it mean by analyse profitability of invested capital

A: Introduction : In simple words, invested capital refers to the sum of all the funds that a business…

Q: Which of the following statements is CORRECT? Profit have no effect on capital Profit will…

A: Profit means the difference between the revenue from operation and total cost . Capital means the…

Q: What is the impact of working capital on the cash flow statement?

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for…

Q: Why does "Retained Earnings" grow in value while the other two line items appear constant?

A: Retained earnings refers to the aggregate of net profits of business after accounting for the…

Q: The gain or loss on the net monetary position in a hyperinflationary economy shall be included in:…

A: This question is answered according to IAS 29 "Financial Reporting in Hyperinflationary Economies"

Q: In computing the cost of capital, do we use the historical costs of existing debt and equity or the…

A: WACC is cost incurred by entity to finance its capital structure. It is sum of weighted individual…

Q: hat is the role of the WACC (weighted average cost of capital) in valuation? How will WACC (weighted…

A: Weighted Average Cost of Capital (WACC): The Weighted Average Cost of Capital (WACC) is the weighted…

Q: Analyze the following statement with a suitable example:  “The current cost adjustment helps to…

A: Inflation seems to be the rate at which prices rise over a specific period of time. Inflation is…

Q: Risk-weighted assets increase Risk-weighted assets decrease

A: Step 1 Risk assets are calculated by adding the amount of risk to the appropriate risk weight of the…

Q: What does the rate of return on total assets measure, and how is it calculated?

A:

Q: How do economies of scale and lumpy assets affect financialforecasting?

A: Economies of scale are cost advantages reaped by companies when production becomes efficient.…

Q: Is cost of capital set by investors or managers?

A: Cos of capital (Coc) is rate of return required to make capital budgeting decisions for example,…

Q: Why Do Capital Expenditures Increase An Organization's Assets ,While Other Expenditures, Like Paying…

A: capital expenditure

Q: What is net operating working capital? Why does it exclude mostshort-term investments and notes…

A: Introduction: Working capital is the capital of company that is used in its day-to-day operational…

Q: Why is the operating return on assets ratio also referred to as the operating returnon investment?

A: Introduction: Operating asset return is nothing but a profitability measure and it is a difference…

Q: Why are assets revalued and liabilities reassessed at the time of change in profit sharing ratio?

A: Meaning of Revaluation of AssetsA revaluation of assets is an action that may be required to…

Q: Explain an example how to calculate rate of return on total assets.

A:

Q: Financial Asset at Fair Value under OCI would have its gain or loss reported at what Financial…

A: Gain or loss on Financial Asset at Fair Value under OCI will be shown as other comprehensive income…

Q: Do we utilize the historical costs of existing debt and equity to compute the cost of capital, or do…

A: The Answer

Q: which ratio is of greater interest to the owner-manager, the rate of return on total assets or the…

A: The ratio refers to the measure that determines the relation between two numbers. In accounting, the…

Q: ?The favorable balance of profit and loss account should be Added in liabilities Added in capital…

A: Favorable Balance of Profit and Loss Account: All costs are recorded on the debit side of the…

Q: How is surplus value transformed into capital, and how is this related to the process of capital…

A: Surplus value refers to the difference between the sale proceeds and cost of product.

Q: Explain how the Du Pont system of analysis breaks down return on assets. Also explain how it breaks…

A: A stakeholder is defined as a "person or group that has an interest in any decision or action of an…

Q: What is the nominal return associated with an investment in capital, and why?

A: Nominal Return is the amount of money generated by an investment.

Q: Why is "Projecting Growth Beyond What the Capital Being Valued Will Support" considered a common…

A: Income Approach There are two different model which was incurred in the income approach.  The…

Q: REQUIRED: ANSWER THE FOLLOWING QUESTIONS IN POINT FORM • What is the difference between book value…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: The monetary value of the net assets is reported at its historical cost on the balance sheet? a.…

A: Physical capital is represented by the capital utilized for acquiring tangible fixed assets or…

Q: How can the retained earnings indicate the number of assets that the company has financed?

A: Retained Earnings: It is the amount which is earned by the company as a profit from business…

Q: Why does the interest in the original investment or the capital cost is included as a cost in the…

A: The annual worth method is the method in which all the cash flows are equally distributed across the…

Q: How is the income based valuation model important in the business? Discuss sub topics such as…

A: Income Based Valuation Approach esteem a business dependent on the past, current, or expected future…

Q: Describe your understanding of the term "Financial Capital." When it comes to capital, what is the…

A: HERE IS THE ANSWER:

Q: lationship between Income Measurement and Asset Valuation

A: Profit or loss calculation is a simplified form of income measurement. Income is defined by an…

Q: arbitrage profit can an investor earn on an investment value

A: In order to earn arbitrage profit we first need to decide which currency to borrow and which to…

Q: Profitability index: What is the profitability index, and why is it helpful in the capital rationing…

A: