Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

New Corporation an up - and - coming biotech company, provides the following selected financial statement information. Financial information for Benchmark Corporation a well -

New Corporation an up-and-coming biotech company, provides the following selected financial statement information. Financial information for Benchmark Corporation a well-established biotech company whose financial ratios represent the gold-standard in the industry, is also provided.
New Corporation Benchmark Corporation
2024202320242023
Cash and cash equivalents $ 350,656 $ 238,446 $ 4,207,872 $ 3,997,478
Short-term investments 490,545353,1929,320,3558,947,541
Accounts receivable 32,58823,137782,112766,470
Property, plant and equipment 852,459588,19718,754,09817,816,393
Intangible assets 2,565,8751,796,11341,054,00039,822,380
Long-term investments 1,545,8561,082,09946,375,68045,448,166
Total asset 5,837,9794,081,184120,494,117116,798,428
Total liabilities 875,697571,36645,787,76443,215,419
Total stockholders equity 4,962,2823,509,81974,706,35373,583,010
Net sales $ 7,865,315 $ 5,112,455 $ 245,253,656 $ 240,348,583
Operating income 1,179,7971,610,42388,291,31684,122,004
Interest expense 39,40626,5691,373,6331,361,286
Investment income 81,45645,9291,670,8811,523,080
Required:
Calculate the cash holdings ratio for both companies. What conclusions do you draw about the cash holdings of New Corporation?
Calculate the investment-to-assets ratio for both companies. What conclusions do you draw about the New Corporation level of investment?
Calculate the return on investments ratio for both companies. What conclusions do you draw about the riskiness of New Corporation investments?

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

Financial Accounting

Authors: Anne Britton, Christopher Waterston

3rd Edition

027365859X, 978-0273658597

More Books

Students also viewed these Accounting questions

Question

What is production control?

Answered: 1 week ago

Question

a sin(2x) x Let f(x)=2x+1 In(be)

Answered: 1 week ago