to earn a profit on resources committed to the business. Three levels of ROE ratios assess Southwest Airlines’ strengths and weaknesses‚ operating results and growth potential. These ratios are used to measure how efficiently the assets are being used to generate net income and sales. The ratios also allow comparison of the profitability of Southwest Airlines to that of similar airlines within the industry. Southwest Airlines is known for their cost- cutting ideology. One of Southwest’s primary
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make investment and corporate policy decisions. 1. Determine the value and net present value of a real assets; 2. Distinguishing between book value and market value; 3. Identifying and forecasting incremental expected cash flows‚ including initial and ongoing capital expenditures‚ investment in net working capital‚ and proceeds from asset sales; 4. Understanding the tax consequences of depreciation and asset sales; 5. Evaluating whether a policy of reselling or scrapping a vessel
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average rate of return method‚ cash payback method‚ net present value method‚ and internal rate of return method. | | | Explain the advantages and disadvantages of various methods of evaluating capital investment proposals. | | | Explain the concept of the time value of money (present value and future value). | | | Contents: | Capital investment analysis is a process of planning‚ evaluating‚ and controlling investments in plant assets. It is also known as capital budgeting. Management
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CONTENTS 1. Understanding the Sources of Finance Available to a Business Identify the sources of finance available to a business. Assess the implications of the different sources Evaluate appropriate sources of finance for a business project 2. Understanding the Implications of Finance as Resource within a Business Analyse the costs of different sources of finance Explain the importance of financial planning Assess the information needs of different decision makers Explain the impact of
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treated as an entirely different company and the performance evaluation criteria is return on assets in recent years after major shift. Although‚ the divisions used to be treated as profit centres‚ this decision meant they are treated more as investment centres. The Company in 2008 & 2009: From the income statement for 2008 and 2009‚ it is noticed that there is an increase in revenue by 4% and 11% increase in net profit in 2009. From balance sheet for 2008 and 2009 it is noticed that Florence has issued
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India PAPER – 2 : STRATEGIC FINANCIAL MANAGEMENT Question No.1 is compulsory. Answer any five questions from the remaining six questions. Working notes should form part of the answer. Question 1 (a) A Bank sold Hong Kong Dollars 40‚00‚000 value spot to its customer at ` 7.15 and covered itself in London Market on the same day‚ when the exchange rates were: US$ = HK$ 7.9250 7.9290 Local interbank market rates for US$ were Spot US$ 1 = ` 55.00 55.20 You are required to calculate
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million Acceptable: Justification of Method Market Valuation: Revenue (Sales) Multiples Revenue multiples is preferred because it is less affected by accounting choices. The approach measures the market value of the operating assets of IPD in relation to market value of operating assets of comparable companies. IPD is not fully integrated with the rested of the company hence we use basic industry comparables multiples. We assume that the multiples ratios of comparable companies of 1988 remain
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Executive Summary Managing financial resources and decisions is a concept of managing the finances of a company for running it efficiently and making decisions which are best fit for the company’s current working and position. The assignment covered analysis Living Wood Ltd‚ a furniture manufacturer. With the help from the cash budget prepared‚ I found that Living Wood is not producing as efficiently that they could be. They have many resources available to them‚ that could assist the company in
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3‚870.0 3‚499.7 3‚830.1 2‚118.0 (3) Enterprise (1)(2) EBITDAX Company Name Chesapeake Energy Corporation Anadarko Petroleum Occidental Petroleum Corporation Apache Corporation Devon Energy Corporation EOG Resources‚ Inc. Value Value $ 15‚489 $ 29‚710 28‚937 40‚880 61‚989 64‚381 32‚252 37‚384 28‚999 37‚353 22‚289
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be used as criterion for acceptance or rejection of a project in capital-budgeting analysis. The project’s initial outlay cost equals $8‚100‚000. The net present value is $15‚955‚500. The internal rate of return is 76.16%. After careful consideration of these values‚ it is in the best interest of the firm to accept this project. The net present value is positive or greater than zero and the internal rate of return is greater than the required rate of return 15%. This is to be considered a “good”
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