Need help with this, it is due tomorrow 2/5/2017 at 11:59 pm

MGMT 4650 Financial/Ratio Analysis Quiz Name________________________________________ Major____________________ Write down or mark your answers clearly. Justify your answers by providing supporting information (for instance, calculated ratios) if the question requires it. Use the reverse sides of pages for any other calculations you need to perform. Make sure that you have filled in all the identification information asked for above Note: there are a total of 9 questions to answer. GOOD LUCK! 1. Fill in the blanks and give reasons: (15 points) Company A Company B ROE 2% 8% Profit Margin % 7% 4% TAT 1.7 3.0 ROA 11% 8.7% Generic Strategy How different are the two firms' financials? How are they related to their strategies? _________________________________________________________________________________ ________________ _________________________________________________________________________________ ________________ __________ 1 2. If two firms (Firm A and Firm B) have equal ROA and sales, but Firm A has a higher profit margin than Firm B. Which firm has more assets? (5 points) A. Firm A B. Firm B C. Same D. Can't tell 3. In the income statement, R&D expenses are: (5 points) a. Operating expenses b. Cost of goods sold (COGS) c. Non operating expenses d. Special charges __________ The information below is excerpted from the financial statements of two companies. Use this information to answer the following questions. (in $ million) Company Company B A Net revenues 31296 107958 Net income 1288 3426 Total current assets 29564.5 18672.5 Total assets Total current liabilities 15370 12708.5 Total liabilities 32030 24671 Total stockholders' 5403.5 17823 equity Footnote: Approximately 98% of Company A's account receivables are from unpaid balances carried by customers using the store credit card. 4. Which company is less liquid (i.e., more risky in the short-term)? Justify using appropriate ratio(s). (10 points) _________________________________________________________________________________ ________________ _________________________________________________________________________________ ________________ _________________________________________________________________________________ ________________ 2 5. Which company is more leveraged? Justify using appropriate ratio(s). (10 points) _________________________________________________________________________________ ________________ _________________________________________________________________________________ ________________ _________________________________________________________________________________ ________________ Use the information below to answer questions 6-7-8. Table -1 % growth in revenues from 2008 to 2009 3 4 7. Calculate and show % change in revenues for Airline carriers (with primary SIC code 4512) for the year 2009 ONLY (from 2008 to 2009). Compare and benchmark the growth rate using the industry growth in Table-1 above. Which airline carrier is better in terms being able to increase their revenues in the year 2009? Which company is the worst? Interpret your analysis by using the information given in the \"Key Points-Current Environment\" table as well. (25 points) 5 8. For the year-end 2008 (from 2007 to 2008), which airline carrier (with primary SIC code 4512) was able to increase their profit per each $1 worth of revenues they have generated over that year? Name the type of the statement (s) you need to use for such analysis? (25 points) 9. For the year 2008, for SAAS AB COGS and SG&A expenses are increasing. Still, however, its Earning per Share (EPS) is increasing considerably. How might this be possible? Comment on the increase in EPS for SAAS AB using the information from an independent auditor's statement in the footnote: (20 points) Note: SAAS AB bought back a portion of its outstanding common stock during 2007 and in 2008 6