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Here are comparative balance sheets and an income statement: Requirements: 1. Compute the following figures a. Accounts Receivable Turnover b. Days in Accounts Receivable c.
Here are comparative balance sheets and an income statement: Requirements: 1. Compute the following figures a. Accounts Receivable Turnover b. Days in Accounts Receivable c. Inventory Turnover d. Days in Inventory e. Purchases f. Accounts Payable Turnover g. Days in Accounts Payable h. Operating Cycle i. Cash conversion days j. Earnings Before Interest and Taxes k. Return on Assets I. Profit Margin m. Asset Turnover n. Return on Common Equity Use the valuation model of Equation 7.6 to value the company above as of December 31,2023. You'll need the (1) discount rate, (2) the forecasted earnings, and (3) a convenient method of finding the present value of an annuity that stretches permanently into the future. The discount rate is 10 percent. The forecasted earnings for 2024 is $320. The Abnormal Earnings, Equation 7.7, that you identify for 2024 is the Abnormal Earnings that the company will experience each year, permanently, in the future. The company does not pay dividends. Suppose the Abnormal Earnings you arrive at for 2024 is $100. It's not, but suppose it is. (3) The present value of the permanent annuity of $100 of Abnormal Earnings is easily computed at the discount rate of 10 percent as $100/0.10=$1,000. The present value of a permanent annuity of $100 at 10% is $1,000
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