MSEM 6100 Critical Issues in Emergency Management

MSEM 6100 Critical Issues in Emergency Management

Answers

a) Working capital=Current Assets-Current Liabilities

Current Assets

		+	+	+	+	+	=
2008	11,875	12,615	2,422	509	1,447	5,822	34,690
2007	9,352	6,034	1,637	346	782	3,805	21,956

Current Liabilities

		+	=
2008	5,520	8,572	14,092
2007	4,970	4,310	9,280

Working Capital=Current Assets-Current Liabilities

		–	=
2008	34,690	14,092	20,598
2007	21,956	9,280	12,676

Current Ratio= Current Assets/Current Liabilities

		/	=
2008	34,690	14,092	2.5
2007	21,956	9,280	2.4

Acid Test Ratio=(Cash & Cash eq + Accounts Rec. +  Short term Invt)/Current Liab

		+	+	=Numerator	/Current Liabilities	=
2008	11,875	12,615	2,422	26912	14092	1.9
2007	9,352	6,034	1,637	17023	9280	1.8

b) ROE= Net income/Beginning total equity

	Net Income	Beginning Equity=Common stock+ Retained Earnings + Other comprehensive inc’	ROE(%)
2008	4834	14532	33.26
2007	3496	9984	35.02

c) ROI=Profit Margin*Asset turnover

Profit margin=Operating Income/Sales

Asset turnover=Turnover/Total assets

	Op. Inc	Sales	Profit Margin
2008	6275	32479	0.193202
2007	4409	24006	0.183662

	Sales	Assets	Asset turnover
2008	32479	25347	1.281375
2007	24006	17205	1.395292

ROI

	Profit Margin	Asset turnover	ROI
2008	0.193202	1.281375	0.247564
2007	0.183662	1.395292	0.256263

d) The liquidity ratios have improved slightly for current year both in case of current ratio and acid test ratio. The profitability ratios have however detiorated with regard to investment and improved with regard to sales.

e)

Liabilities=Total assets-Total equities

	2008	2007	2006	2005	2004
Total assets	39,572	25,347	17,205	11,516	8,039
Shareholders’ equity	21,030	14,532	9,984	7,428	5,063
Total Liabilities	18,542	10,815	7,221	4,088	2,976

f)Yes, they are consistent with each other. All assets liabilities and equities are increasing.

g) The most meaningful trends for the investor are that net income is increasing every year and also the return on equity. The less meaningful trends would be short term investments are increasing.

h) Other access before making investment would be leverage ratios, turnover ratios, profitability ratios.

MSEM 6100 Critical Issues in Emergency Management MSEM 6100 Critical Issues in Emergency Management

MSEM 6100 Critical Issues in Emergency Management