Question
Please show breakdown for calculations. Dover Corporation bought a long-term asset for $125,000. The asset has a 25% CCA rate. At the end of year
Please show breakdown for calculations.
Dover Corporation bought a long-term asset for $125,000. The asset has a 25% CCA rate. At the end of year 5, the firm sold the asset for 25% of its original value.
In the year of 2020, the firm just paid $520 in dividends and $311 in interest expense. The addition to retained earnings is $412.46. and net new equity is $850. The tax rate is 34 percent. Sales are $7,250 and depreciation is $6685.
- Given this information, determine the value of the terminal loss or recapture at the end of the year.
- What are the earnings before interest and taxes in the year 2020?
- What is the after-tax net profit for the year 2020?
The company plans to efficiently maintain the assets in the long run. The average total assets of the firm are $55,000. The firm also plans to cover the solvency ratios in a reasonable manner to seek additional refinancing from the capital providers. The company has 55,000 shares outstanding. The company plans to raise more capital by issuing shares. The company's ROE has been determined to be 12% which is likely to go up in the next year. The company is concerned about the profitability ratios of the company and it is seeking your advice to improve them. The sales of the recent quarter of 2019 have gone down to $5,800 whereas the net earnings are $ 3,200.
The company is planning to expand in the future. It is planning to open one more branch in the Greater Vancouver region. The shareholders, Board of Directors (BOD) and the managers may have a disagreement on its decision though.
- What is the Asset turnover for the company?
- Calculate the TIE ratio and also respond whether it is satisfactory or not?
- How will issuing more shares affect the capital structure of the company?
- What does the firm need to do to raise its ROE?
- Calculate the profit margin ratio of the company and comment on the profitability performance of the company.
- What type of financial decision is the company making with the expansion?
- The disagreement among the shareholders, BOD and the managers is popularly points to what in finance?
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