A firm can increase its Operating Return on Assets (OROA) through: (1) Operation Management: Increasing operating profit margin by efficiently managing costs like marketing expenses, general selling and administrative expenses (2) Asset Management: Increasing total asset turnover by selling inventories and collecting accounts receivables as quickly as possible
Return on asset = 1275 * 12% Return on asset = 153
If you look at what Return on Assets is comprised of, Net Profit Margin and the Total Asset Turnover, if the firm is having a very slow turnover, the ROA will be declining if the turnover is greater in magnitude to the NPM.
Net income = total assets * return on total assets. net income = 1275 * 0.12 = 153
Asset management ratios indicate a) how well a firm is using its assets to support sales b) how efficiently a firm is allocating its liabilities c) the return on assets d) the profitability of the firm
Short-term liabilities resulting from the primary business operations of a firm. They are non-interest bearing and comprise of accounts payable, accrued expenses, and income tax payable. Operating liabilities are deducted from total assets to determine the net operating assets.
Operating Assets are usually items of plant, machinery or equipment used by a business in the generation of its revenue. A crane or a bull dozer would be examples of an operating asset using by a building firm. A fixed asset on the other hand would be the building owned by the construction company that it uses to conduct its business.
liquidity position of a firm is the amount of liquid assets ,that is, cash ,bank balance and those assets which can be converted into cash as and when required by the firm which is owned by the firm currently.
Common shareholders have the lowest claim on the assets of assets of a firm. They have only a residual claim on the assets and are far below the preferred stock classification.
It will inrease by 10%
_____ measure how effectively a firm manages assets to generate revenue.
You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost-structure information for this company. All of it pertains to an output level of 10 million units. (1) Using this information , find the break-even point in units of output for the firm. ------------------------------------------------- Return on operating assets = 30% Operating asset turnover = 6 times Operating assets = $20 million Degree of opearting = 4.5 times -------------------------------------------------- (2) Define the term financial leverage. Does the firm use financial leverage if preference shares are present in the capital structure. (3) Define the term operating leverage. What type of effect occurs when the firm uses opearting leverage ?
Since both sides of the balance sheet (the Assets side and the Liabilities/Owners' Equity side) must have equal totals, an entry showing an increase in an asset must be balanced with an corresponding...Sorry but until Jeff Hardy and Matt Hardy are off the drugs for good and have been clean and sober for at least a year neither will be returning to WWE.A firm can increase its Operating Return on Assets (OROA) through: (1) Operation Management: Increasing operating profit margin by efficiently managing costs like marketing expenses, general selling...There are many transactions that do this. If you receive a payment on account from a customer, you increase Cash and decrease Accounts Receiveable. If you pay for raw materials or merchandise with..
___ measure how effectively a firm manages assets to generate revenue
The measure on how effectively a firm uses its assets to generate revenue is the profit margin. This will determine if the firm is running at a profit or at a loss.
By increasing revenues or the cost of the assets.
a - lenders
Decreasing marginal return is when on the increase in variable input, the marginal product of the variable input decreases. This results due to short run production of the firm.
By financing a portion of permanent current assets on a short-term basis, we run the risk of inadequate financing in tight money periods. However, since short-term financing is less expensive than long-term funds, a firm tends to increase its profitability over the long run (assuming it survives). In answer to the preceding question, we stressed less risk and less return; here the emphasis is on risk and high return.
Rapidly expanding sales will require a buildup in assets to support the growth. In particular, more and more of the increase in current assets will be permanent in nature. A nonliquidating aggregate stock of current assets will be necessary to allow for floor displays, multiple items for selection, and other purposes. All of these "asset" investments can drain the cash resources of the firm.
a. Security b. Assets used to produce goods and services c. The goods and assets produced by the firm d. both real assets and financial assets
That is NOT true.
Amount of fixed assets used by the firm
Often they don't, and when they do it is because equity investment is riskier (given that creditors have, by default, the overriding claim over the assets of the relevant firm).