Health Care Finance Fourth Edition by Judith J. Baker and RW Baker
Questions 1 and 2 are provided of 7-2; but looking at 7-3 calculating the PV ratio and CVP ratio? Any help?
Health Care Finance Fourth Edition by Judith J. Baker and RW Baker
Questions 1 and 2 are provided of 7-2; but looking at 7-3 calculating the PV ratio and CVP ratio? Any help?
Related questions
| E13-5 Matching Each Ratio with Its Computational Formula LO 13-4, 13-5, 13-6, 13-7 | |||||||
| Match each definition with its related ratios or percentages by selecting the appropriate letter in the drop down provided. | |||||||
| Definitions: | Ratios or Percentages | Definitions | |||||
| A. | Net Income (before extraordinary items) ÷ Net Sales | 1 | Profit margin | ||||
| B. | Days in Year ÷ Receivable Turnover ratio | 2 | Inventory turnover ratio | ||||
| C. | Net Income ÷ Average Stockholdersâ Equity | 3 | Average collection period | ||||
| D. | Net Income ÷ Average Number of Shares of Common Stock Outstanding | 4 | Dividend yield ratio | ||||
| E. | Return on Equity â Return on Assets | 5 | Return on equity | ||||
| F. | Quick Assets ÷ Current Liabilities | 6 | Current ratio | ||||
| G. | Current Assets ÷ Current Liabilities | 7 | Debt-to-equity ratio | ||||
| H. | Cost of Goods Sold ÷ Average Inventory | 8 | Price/earnings ratio | ||||
| I. | Net Credit Sales ÷ Average Net Receivables | 9 | Financial leverage percentage | E | |||
| J. | Days in Year ÷ Inventory Turnover Ratio | 10 | Receivable turnover ratio | ||||
| K. | Total Liabilities ÷ Stockholdersâ Equity | 11 | Average daysâ supply of inventory | ||||
| L. | Dividends per Share ÷ Market Price per Share | 12 | Earnings per share | ||||
| M. | Market Price per Share ÷ Earnings per Share | 13 | Return on assets | ||||
| N. | [Net Income + Interest Expense (net of tax)] ÷ Average Total Assets | 14 | Quick ratio | ||||
| O. | Cash from Operating Activities (before interest and taxes) ÷ Interest Paid | 15 | Times interest earned | ||||
| P. | Net Sales Revenue ÷ Net Fixed Assets | 16 | Cash coverage ratio | ||||
| Q. | (Net Income + Interest Expense + Income Tax Expense) ÷ Interest Expense | 17 | Fixed asset turnover ratio | ||||
| Permian Partners (PP) produces from aging oil fields in west Texas. Production is 1.89 million barrels per year in 2013, but production is declining at 5% per year for the foreseeable future. Costs of production, transportation, and administration add up to $25.90 per barrel. The average oil price was $65.90 per barrel in 2013. |
| PP has 7.9 million shares outstanding. The cost of capital is 7%. All of PPâs net income is distributed as dividends. For simplicity, assume that the company will stay in business forever and that costs per barrel are constant at $25.90. Also, ignore taxes. |
| a. | Assume that oil prices are expected to fall to $60.90 per barrel in 2014, $55.90 per barrel in 2015, and $50.90 per barrel in 2016. After 2016, assume a long-term trend of oil-price increases at 3% per year. What is the PV of a PP share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) | |
| Present value per share | $ |
| b-1. | What is PPâs EPS/P ratio? (Do not round intermediate calculations. Round your answer to 3 decimal places.) |
| EPS/P ratio |
| b-2. | Is it equal to the 7% cost of capital? | ||||
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