Answer-Chapter 3-Financial Management

Problems (Page 112) 3-1 to 3.7, 3-1 Greene Sisters has a DSO of 20 days. The companys average fooling sales be $20,000. What is the level of its accounts receivable? Assume in that respect be 365 days in a year. Answer: mean solar day Sales Outstanding= Receivables / Average Sales per day AR = 20 X $20000 = $400,000 3-2 Vigo vacations has an rectitude multiplier of 2.5.The companys assets are financed assets with some combination of long-term debt and common equity. What is the companys debt proportion? Answer: The equity multiplier is 2.5. This means that for both dollar of equity the company has $2.5 of assets Equity Multiplier = 2.5 and so Equity symmetry = 1/EM Equity Ratio = 1/2.5 = 0.40 the formula is: Debt Ratio + Equity Ratio = 1 Therefore Debt Ratio = 1 - Equity Ratio = 1 - 0.40 = 0.60 or 60% 3-3 Winston Washers stock outlay is $75 per share .Winston has $10 one thousand thousand in supply assets. Its balance sheet shows $1 billion in up-to-date liabilities, $3 billion in long-term debt and $6 billion in common equity. It has 800 million shares of common stock spectacular .What is Winstons market/ book ratio?

Answer: market place value per share = $75 common equity = 6,000,000 quash of shares outstanding = 800 millions shares Market-to-book ratio = market value per share/(common equity/number of shares outstanding) Market-to-book ratio = $75/(6,000,000/800,000,000) Market-to-book ratio = $75/(6,000,000/800,000,000) market-to-book ratio = $75/7.5 market-to-book ratio = 10 Winston Washers market-to-book ratio is 10. 3-4 A company has an EPS of $1.50, a bullion endure per share of $3.00, and a price /cash flow ratio of 8.0.What is its P/E ratio? Answer: First Formula: Price /cash flow ratio = Price per share /cash flow per share Price per share = $8 x $3 = $24 secondly Formula: P.E = Price per share / EPS P.E = $24 / 1.5 = 16 3-5 Needham Pharmaceuticals has a internet margin of 3% and an equity multiple of 2.0. Its sales are $100 million... If you want to get a full essay, secern it on our website: Orderessay

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