Answer: 1. a. Liquidity Ratios
b. Activity Ratios
c. Financial Ratios
d. Profitability Ratios
e. Market Value Ratios
2. A. Seasonal factors can distort data
B. Window dressing might be in effect.
Explanation:
a. Liquidity Ratios give the company an idea of it's ability to access hard currency. Examples include the Current ratio and the Quick ratio.
b. Activity Ratios allows stakeholders know how efficient the company is at running daily operations. Examples include; Receivables Turnover and Asset Turnover ratios.
c. Financial Ratios are very important to the company as they can decide if a company will be able to get loans. They include ratios that measure the firm's ability to pay off debt as well as the overall condition of the firm in terms of it's finances.
Examples include; Net Profit Margin and Debt to Asset ratio.
d. Profitability Ratios
These help ascertain the ability of the business to make returns based on its resources. Examples include Return on Assets and Return on Equity.
e. Market Value Ratio
These essentially help the company and other stake holders know what the company is worth in the market. An example is the Book Value per Share ratio.
2. Seasonal Factors may indeed distort data depending on the type of industry that the firm is into and ratios will usually not show this. For instance, an Ice Cream company will not have strong sales in winter so when interpreting ratio analysis it would be important to note that this could happen.
Another weakness is that ratios are calculated based on the figures that are given by a company. These figures may not truly reflect the actual situation of the company when management supply more optimistic figures than is true. This is called Window Dressing.
It will have the effect of distorting the ratios so that they do not represent a true representation of the actual situation of the company.
Iron triangles have given way to INTER-GOVERNMENTAL LOBBYING over the years.
Iron triangles refer to a mutual relationship between three three groups or organizations such as government agencies, interest groups and legislative committees (law makers). It is a policy making relationship in the United States politics.
Answer:
55 legal pads.
Explanation:
The level at which Blackmon Brothers should order more legal pads is the re-order point.
The calculate re-order point, we require
Average daily usage
Delivery lead time
Safety stock is needed.
For Blackmon, Average daily usage will be 165 divided by 15 days
=165/15
=11 legal pads per day.
Lead time is 3 days
Formula for getting the re-order point
= (average daily usage x delivery time) + requires safety stock
For Black man
= (11 x 3)+ (11 x 2)
=33 + 22
=55 legal pads.
They should re-order when they have a balance of 55 legal pads.
Small business is difficult in the economy because its self made
Answer:
The real exchange rate would result in a growth of the relative price of Chinese TVs over the price of Russian Vodka.
This is because Chinese TVs are becoming more technologically advanced, increasing both their nominal and real value, while Russian Vodka is being produced en masse, but without technological progress, decreasing both its nominal and real value.
The nominal exchange rate would result in the ruble depreciating strongly against the Yuan.
The quick growth of money supply in Russia means inflation, and this added to the loss of value of the Vodka exports, results in the decrease of nominal value for the ruble against the Yuan, which has a moderate growth in money supply (meaning moderate inflation), and benefits from the exports of a good that is appreciating (the Chinese TVs).
Explanation:
