Given the information in the question on the previous page, which actions should a manager consider to improve the firm's overall performance? Increase the firm's debt level to increase its financial leverage Continue the current asset management policies. Cut product prices to increase the level of revenue. d. Ing Increase manufacturing overhead. e. Seek greater manufacturing efficiencies to improve lower COGS. b. A firm has a days-sales-outstanding ratio (DSO) of 48.1: the industry average is 42.0. As a financial analyst, what conclusions could you draw from this situation? a. The firm's cost of goods sold exceeds the industry's average. b. The firm is more profitable than the industry on average. c. The firm may have too few accounts receivable. d. The firm's credit policy may be too lenient or lax. e. The firm collects its credit sales more quickly than the industry on average. Given the information in the question above, which actions should a manager consider to improve the firm's overall performance? Improve the manufacturing efficiency of the firm by adding another manufacturing shift Lower product prices to improve gross margins. c. Loosen the firm's credit terms to generate more sales. d. Offer customers cash discounts if payments are made within 10 days of purchase. Reduce the firm's debt level to reduce its financial leverage. 8. A financial analyst is given the following ratios for a firm and its industry. Firm Industry Times Interest Earned (TIE) 3.4 5.0 EBITDA Coverage 2.0 4.6 Which of the following statements best represent the conclusion that the analyst could draw from these ratios? a. The firm has a lower margin of safety than the industry on average. b. The firm leases too many of its assets. c. The firm covers its fixed charges at a higher rate than the industry on average. d. The firm's interest charges are smaller than the industry on average. e. The firm is more profitable than the industry. 9. What can be concluded from the following Current Ratio (CR) and Quick Ratio (QR) for the Franco Company and its industry? 2015 2016 2017 Industry Current 2.4x 2.3x 2.2x 1.5x Quick 1.5x 1.4x 1.3x 1.2x Franco is more liquid than the industry on average and the firm is becoming even more liquid. Franco is less liquid than the industry on average and the firm is becoming even less liquid. c. Franco is more liquid than the industry on average but the firm is becoming less liquid. d. Franco is less liquid than the industry on average but the firm is becoming more liquid. Given the information in the question on the previous page, which actions should a manager consider to improve the firm's overall performance? Increase the firm's debt level to increase its financial leverage Continue the current asset management policies. Cut product prices to increase the level of revenue. d. Ing Increase manufacturing overhead. e. Seek greater manufacturing efficiencies to improve lower COGS. b. A firm has a days-sales-outstanding ratio (DSO) of 48.1: the industry average is 42.0. As a financial analyst, what conclusions could you draw from this situation? a. The firm's cost of goods sold exceeds the industry's average. b. The firm is more profitable than the industry on average. c. The firm may have too few accounts receivable. d. The firm's credit policy may be too lenient or lax. e. The firm collects its credit sales more quickly than the industry on average. Given the information in the question above, which actions should a manager consider to improve the firm's overall performance? Improve the manufacturing efficiency of the firm by adding another manufacturing shift Lower product prices to improve gross margins. c. Loosen the firm's credit terms to generate more sales. d. Offer customers cash discounts if payments are made within 10 days of purchase. Reduce the firm's debt level to reduce its financial leverage. 8. A financial analyst is given the following ratios for a firm and its industry. Firm Industry Times Interest Earned (TIE) 3.4 5.0 EBITDA Coverage 2.0 4.6 Which of the following statements best represent the conclusion that the analyst could draw from these ratios? a. The firm has a lower margin of safety than the industry on average. b. The firm leases too many of its assets. c. The firm covers its fixed charges at a higher rate than the industry on average. d. The firm's interest charges are smaller than the industry on average. e. The firm is more profitable than the industry. 9. What can be concluded from the following Current Ratio (CR) and Quick Ratio (QR) for the Franco Company and its industry? 2015 2016 2017 Industry Current 2.4x 2.3x 2.2x 1.5x Quick 1.5x 1.4x 1.3x 1.2x Franco is more liquid than the industry on average and the firm is becoming even more liquid. Franco is less liquid than the industry on average and the firm is becoming even less liquid. c. Franco is more liquid than the industry on average but the firm is becoming less liquid. d. Franco is less liquid than the industry on average but the firm is becoming more liquid
