Re: [ vuZs.net ] FIN 630 & CS507

this is final shape of the fin 630 assignment check it out

and if is their mistake then correct it plz and SHukria reply me asap 

Solution of Question no.1:-

 

Quick Ratio / Acid Test Ratio = (current assets – Inventory) / (current Liabilities)

Quick Ratio / Acid Test Ratio = ((937.000 + 200,000) – 212,000) / 409,000

Quick Ratio / Acid Test Ratio = (1137, 000 – 212,000) / 409,000

Quick Ratio / Acid Test Ratio = (925,000) / 409,000

Quick Ratio / Acid Test Ratio = 2.261 times

 

Interest coverage Ratio = EBIT / Interest expenses

Interest coverage Ratio = (50, 15,000 / 2550, 000)

Interest coverage Ratio = 19.67 %

 

Earnings per Share = Profit available to Shareholders / Average common shares outstanding

Earnings per Share = (3,09,40,000 – 12,30,000) / 2000000

Earnings per Share = 14.85 Rs.

 

Net Profit Margin = (Net Income/ Net Sales)* 100

Net Profit Margin = (3, 09, 40,000 / 105, 000,000) * 100

Net Profit Margin = (0.477) * 100

Net Profit Margin = 29.46 %

 

  

Intrinsic Value of Stock = Future Value / Expected ROI ^{Number of Years}   

Intrinsic Value of Stock = D1/(r-g)

Intrinsic Value of Stock = 5.30 / (12% - 0) ¹

Intrinsic Value of Stock = 5.30/ (12-0) = 5.30/ (12%)

Intrinsic Value of Stock = 44.16

Solution of Question no.2:-

 

Ratio	Industry Average	Company Ratio Ranking	Ranking (Poor / Good)
Quick	1.75 Times	2.26 times	Good
Net Profit Margin	35%	29.47 %	Poor
Interest coverage	16 Times	19.67 Times	Good
Earning per share	Rs. 1.35	Rs. 14.85	Good

 

 

On Fri, Nov 11, 2011 at 11:25 PM, mc100203620 Rozy <mc100203620@vu.edu.pk> wrote:

        

 

Solution of Question no.1:-

 

Acid Test Ratio = Current assets-Inventories-prepaid expense / Current Liabilities

       = (200,000 + 937,000 – 212,000) / 409,000 = 2.262

       =2.26 Times 

 

 

Net Profit Margin = (Net Profit after Taxation / Net Sales)*100

            = (30940000/105000000)*100

            =29.47%

 

Times Interest Earned =EBIT / interest Expense

       =50, 150000/ 2, 550000

       =19.67 Times

 

Earning per Share= (Net income – Dividends on preferred stock) / average outstanding shares

 =30940000-1230000/2000000

            =14.85

 Intrinsic value of stock = D1/ (r-g)

         = 5.30/ (12-0)

        = 5.30/ (12%)

        = 44.16

 

Solution of Question no.2:-

 

Ratios	Industry Average	Company's ratio	Ranking (Poor/good)
Quick	1.75 Times	2.26 Times	Good
Net Profit Margin	35%	29.47%	Poor
Interest Coverage	16 Times	19.67 Times	Good
Earning per share	Rs. 1.35	Rs.14.85	Good

 

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