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 asapSolution 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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