What is a good equity ratio

    • [DOC File]Chapter 16: Capital Structure: Limits to the Use of Debt

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      The after-tax required return on Weinberg’s equity if it were an all-equity firm is 10%. Currently, the firm has $1.2 million in debt outstanding and is subject to a corporate tax rate of 35%. The personal tax rate on interest income is 15%, and the personal tax rate on equity distributions is zero.

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    • [DOC File]Ratio of the Month: Working Capital

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      Watson’s return on equity is 5.46 percent (5.46% = $1,300 million / $23,791 million common equity), compared to 2.31 percent for the industry average. Watson’s return on equity is due to the firm having a higher operating return on assets and using a lot more debt …

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    • [DOC File]WHAT IS MANAGEMENT

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      Current ratio 1.5 Working capital P20,000 Debt/equity ratio .8 Return on equity .2 If net income for 1997 is P40,000, the balance sheet at the end of 1997 total assets of . a. P340,000 b. P360,000 c. P300,000 d. P400,000. 33. An enterprise has total asset turnover of 3.5 …

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    • [DOC File]Chapter 3

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      The amount of equity is given by . If Ms buy no bonds, the value of equity is. If Ms buy bonds, the value of equity is . Thus, the debt-equity ratio can range from $700 million / $800 million = 7/8 to $1,000 million / $500 million = 2. b. If the corporate tax rate is 30%, the equilibrium interest rate will be 8.57%.

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    • [DOC File]Ratio and Accounts Analysis - CPA Diary

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      The TIE ratio is a good indicator of whether the interest burden is excessive relative to the firm's ability to generate earnings. The debt ratio and the debt to equity ratio are good measures relative to other firms. There's no exact amount of debt that's too much, however, most financial analysts feel that debt in excess of 60% of capital ...

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    • Debt-To-Equity Ratio – D/E Definition

      The higher the ratio, the greater the risk to a present or future creditor. Look for a debt to equity ratio in the range of 1:1 to 4:1. Most lenders have credit guidelines and limits for the debt to equity ratio (2:1 is a commonly used limit for small business loans).

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    • [DOC File]Examples of Questions on Ratio Analysis

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      Therefore, the debt-to-equity ratio is a ratio of 40/60, or 66.67%. Some financial analysts prefer to use the debt ratio; others prefer to use the debt-to-equity ratio. It isn’t necessary to use both of them because they tell you the same information - just in a different form.

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    • [DOC File]COMMON RATIOS

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      Debt/equity ratio (Leverage ratio) = total farm liabilities/total farm equity. ... However, anything less then 40 percent is considered good, between 40 and 75 percent is a caution area and above 75 percent is a danger area. There are a couple of areas to watch out for as you look at your debt to asset ratio.

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    • [DOC File]A NOTE ON FINANCIAL ANALYSIS

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      Return on equity is healthy and at the top of the industry, showing that the company has made good use of the funds invested by the investors. The debt-to-equity is much higher than the ideal ratio of 100%. However, when compared to the other companies in the industry, a 112% debt-to-equity ratio looks good.

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    • Financial Ratios and Quality Indicators

      Capital structure: Both the equity multiplier and the debt-to-equity ratio tell us that the firm has become less levered. To get a better idea about the proportion of debt in the firm, we can turn the D/E ratio into the D/V ratio: 1999: 43%, 1998: 46%, 1997:47%, and the industry-average is 47%.

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