Level_of_Measurements

Ch 1 Exercise 18 A. 1) Quantitative 2) Qualitative 3) Quantitative 4) Quantitative 5) Qualitative 6) Qualitative 7) Qualitative 8) Qualitative 9) Quantitative 10) Qualitative 11) Quantitative 12) Qualitative B. 1) Ratio 2) Nominal 3) Nominal 4) Ratio 5) Nominal 6) Nominal 7) Ratio 8) Nominal 9) Ratio 10) Nominal 11) Ratio 12) Nominal Ch 3 Problem 3-41 (y2-y1)/(x2-x1) (1,150,000-950,000)/(45,000-35,000) M=200,000/10,000 =20 Ch 3 Case 3.18 A) Working Capital Current Assets-Current Liabilities 1999 2,696,805-1,809,710= 887,095 1998 2,228,186-1,429,674=798,512 Current Ratio Current Assets/Current Liability 1999 2,696,805/1,809,710= 1.5 1998 2,228,186/1,429,674= 1.6 Acid Test Ratio Cash + Accounts Receivable/Current Liabilities 1999 1,982,710/1,809,719=1.1 1998 1,887,318/1,429,674 = 1.3 B) ROE Net Income/Average Owner Equity 1999 427,944/2017118+1344375/2 = 1,680,746.5 427,944/1,689,746.5= 0.25 1998 346,399/1,344,375+930,044/2=1,137,209.5 346,399/1,137,209.5 =0.30 C) ROI Net Income/Average Total Assets 1999 427,944/3,954,688 + 2,890,380/2 427,944/3,422,534=0.13 1998 346,399/2,890,380+2,039,271/2 346,399/2,464,825.5 = o.14 ROI Margin Net Income/ Sales X Turnover Sales/Average Total Assets 1999 427,944/8,645,564 = 0.049 X 8,645,564/3,422,534 = 2.53 0.049 x 2.53 = 0.019 1998 346,399/7,467,925 =0.046 X 7,467,925/2,454,825.5 = 3.04 0.046 x 3.04 = 0.015 D) 1998 had a better debt paying ability than 1998. Working Capital increased between 1998 and 1999 which mean stockholders did not take a high dividend payout E) Stockholders might have wanted to reinvest their dividends into other firms.