,FIN2601 Assignment 1 COMPLETE ANSWERS) Semester
2 2024 - DUE August 2024 ; 100% TRUSTED Complete,
trusted solutions and explanations.
Question 1 Complete Mark 1.00 out of 1.00 QUIZ Which of the
following statements are correct if a company focuses on profits
as financial goal? a) Risk is ignored. b) The share price is
ignored. c) The size of the investment required to generate the
profit is ignored. 1. a and b 2. c and a 3. b and c 4. a, b and c
Question 2 Complete Mark 1.00 out of 1.00 Question 3
Complete Mark 1.00 out of 1.00 Which one of the following
best describes a capital market? 1. A financial relationship
created by institutions and arrangements that allow suppliers and
demanders of short-term funds to make transactions. 2. An
intangible market for the purchase and sale of securities not
listed on organised exchanges. 3. A market that allocates funds
to their most productive uses as a result of competition among
wealth-maximising investors. 4. A financial relationship created
by institutions and arrangements that allow suppliers and
demanders of long-term funds to make transactions. The
Harddrive, the technology consulting company, given its
earnings before interest and tax (EBIT) is R. The company’s
time interest earned (TIE) ratio is 8,0, its tax rate is 35%, and its
total assets turnover ratio is 1,25 with a sales value of R800 000.
What is the company’s return on assets (ROA)? 1. 5,63% 2.
14,21% 3. 17,77% 4. 22,32% Question 4 Complete Mark 1.00
out of 1.00 Question 5 Complete Mark 1.00 out of 1.00
Financial reporting provides information about a company’s
economic resources and the claims to those resources and
, various parties have varying objectives when they examine a
company’s financial statements. Which of the following
statement is least correct when analysing ratios? 1. Liquidity
ratios measures the company ability to meet its financial
obligation in the long run. 2. Activity ratios measures the
efficiency with which accounts are converted into investments.
3. Profitability ratios measures the company’s profit with respect
to profit for the year. 4. Debt ratio is a proportion of total assets
financed by the company’s liabilities. Kiddies County clothing
company pays 6% interest on its outstanding debt, which
amounts to R720 000. The company’s sales are R2 478 000, its
tax rate is 40% and its net profit margin is 10,7%. What is the
company time interest earned ratio? 1. 1,74 times 2. 5,73 times
3. 6,74 times 4. 7,80 times Question 6 Complete Mark 1.00 out
of 1.00 Question 7 Complete Mark 1.00 out of 1.00 Evolve
Health, a pharmaceutical company, the statement of
comprehensive income shows R87 960 in earnings before tax
(EBIT), interest expense of R62 500 and R10 000 in preference
share dividend with a tax rate of 30%. The company had 1 000
number of shares issued and 1 000 number of shares
outstanding. If the price/earnings ratio (P/E) is reported as 5,30
and ROE is 23,3%. What is the company’s market to book ratio?
1. R0,81 2. R1,23 3. R2,33 4. R3,91 Gold Screen Studios had
profit for the year of R33 503 and preference share dividend of
R26 200 at the end of last year. The company sales were R714
000, its total assets turnover was 1,02, and the company’s return
on equity (ROE) was 8%. The company is financed entirely with
debt and equity. What is the company’s debt ratio? 1. 69,10% 2.
86,96% 3. 91,80% 4. 114,99% Question 8 Complete Mark 1.00
