Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose you are conducting an analysis of the financial performance of Green Caterpillar Garden Supplies Inc. over the past three years. The company did not
Suppose you are conducting an analysis of the financial performance of Green Caterpillar Garden Supplies Inc. over the past three years. The company did not issue new shares during these three years and has faced some operational difficulties. The company has thus pilot tested some new forecasting strategies for better operations management. You have collected the company's relevant financial data, made reasonable assumptions based on the information available, and calculated the following ratios. Ratios Calculated Year 1 Year 2 Year 3 Price-to-cash-flow 6.20 8.06 9.03 Inventory turnover 12.40 14.88 16.67 Debt-to-equity 0.30 0.32 0.38 Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that apply. The market value of Green Caterpillar Garden Supplies Inc.'s common shares declined over the three years. A plausible reason why Green Caterpillar Garden Supplies Inc.'s price-to-cash-flow ratio has increased is that investors expect higher cash flow per share in the future. The company's creditworthiness has improved over these three years as evidenced by the increase in its debt-to-equity ratio over time. Green Caterpillar Garden Supplies Inc.'s ability to meet its debt obligations has worsened since its debt-to-equity ratio increased from 0.30 to 0.38
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started