The divisional manager is considering an investment of $10,000 in an asset which will have a ten-year life with no residual value and will earn a constant annual profit after depreciation of $1,600. The cost of capital is 15%. Calculate the following and comment on the results. (i)...
In accounting, the margin of safety is a handy financial ratio that’s based on your break-even point. It shows you the size of your safety zone between sales, breaking-even and falling into making a loss. In other words, how much sales can fall before you land on your break-even poi...
The margin of safety ratio can be defined as the what? What is the margin? What is the division's margin? What is a controllable margin used for? What is the controllable margin used for? What is the difference between the contribution margin ratio and the margin of safety ratio?
Definition: Margin of Safety (MOS) is defined asthe excess of actual or projected sales over break-even sales, that can be expressed in monetary terms or units, or as a percentage of total sales. The margin of Safety implies the sales point over and above the break-even point, that resu...
Information base of research - a survey of 4800 respondents in three Russian regions with different levels of socio-economic status. The paper identified resource characteristics affecting the economically active population, revealed values ??of the factors that determine its growth or, conversely, ...
What is safety stock? What is gross margin? What is the difference between gross profit margin and gross margin? What is the difference between gross margin and contribution margin? What is the contribution margin ratio? What is the difference between gross margin and markup?
Question: 5-1 What is the meaning of contribution margin ratio? How is this ratio useful in planning business operations?5-4 What is the meaning of operating leverage?5-7 What is the meaning of margin of safety? 5-1 What ...
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Current Ratio = (Cash + Cash Equivalent) / Current Liabilities If the cash ratio is equal to 1, the business has the exact amount of cash and cash equivalents to pay off the debts. If the cash ratio is less than 1, there’s not enough cash on hand to pay off short-term debt. ...
Price-to-book (P/B) ratio: This measures the value of a company's assets and compares them with the stock price. When the price is lower than the value of the assets, the stock is generally undervalued. Price-to-earnings (P/E): This shows the company's earnings to determine if the...