Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Following are the income statements and balance sheets for a Company. a) Calculate the Return on assets ratio for years 2021 and 2020. b) Is

image text in transcribed
image text in transcribed
Following are the income statements and balance sheets for a Company. a) Calculate the Return on assets ratio for years 2021 and 2020. b) Is the calculated return on assets in year 2021 enough for this company? Please provide a brief justification for your answer. c) Calculate the cash conversion cycle in 2021. Please take the average figures for year 2021 and 2020 from the balance sheet. d) Explain why you would calculate the cash conversion cycle. Is it better to have a longer or shorter cash conversion cycle for the company? e) The accountant of this Company wants to perform a revaluation of the assets of the company. He thinks that the current value of the fixed assets in the market is higher than the book value. He thinks that the value at 31 December 2021 is 450,000. There are no other adjustments needed. Calculate: i) the intrinsic value of the whole company and ii) the net asset value. f) This company has the potential of a growth of the sales and profit of 10% a year. What is the influence of this information on the intrinsic value of the company computed in part e)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bitcoin Cash What You Need To Know About Bch

Authors: Alexander O. M.

1st Edition

1976721229, 978-1976721229

More Books

Students also viewed these Finance questions