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标题: Reading 55: LOS c ～ Q1 [打印本页]
作者: spaceedu    时间: 2008-4-14 14:13     标题: [2008] Session 14 - Reading 55: LOS c ～ Q1

1.Harold Adams is a financial analyst reviewing the financial data for Butler, Inc., for the years 1999, 2000, and 2001. Information for several selected ratios are given below:

Table 1

Selected Data on Butler, Inc.

Ratios

2001

2000

1999

EBIT interest Coverage Ratio

19.5

17.2

13.7

EBITDA interest coverage

10.0

9.0

8.0

Funds from Operations/TD

48.0

48.0

55.0

Free Operating Cash Flow/TD

NA

NA

NA

Pretax Return on Capital

26.0

24.1

18.5

Operating Income/Sales

36.0

36.5

37.8

LTD/Capitalization

29.0

28.9

31.8

TD/Capitalization

45.0

58.0

60.2

Adams obtained Standard and Poor's information about median ratios by credit rating. These ratios are reproduced below:

Table 2

Standard & Poor's Select Median Rating Criteria

Ratios

AAA

AA

A

BBB

BB

B

EBIT interest Coverage Ratio

12.9

9.2

7.2

4.1

2.5

1.2

EBITDA interest coverage

18.7

14.0

10.0

6.3

3.9

2.3

Funds from Operations/TD

89.7

67.0

49.5

32.3

20.1

10.5

Free Operating Cash Flow/TD

40.5

21.6

17.4

6.3

1.0

(4.0)

Pretax Return on Capital

30.6

25.1

19.6

15.4

12.6

9.2

Operating Income/Sales

30.9

25.2

17.9

15.8

14.4

11.2

LTD/Capitalization

21.4

29.3

33.3

40.8

55.3

68.8

TD/Capitalization

31.8

37.0

39.2

46.4

58.5

71.4

What would most likely be the result if Butler were to provide Adams with additional 1999 data? It would:

A)   provide a stronger basis for a decision concerning the firm's rating.

B)   distort the financial trend for Butler, Inc.

C)   render the year 2001 data invalid.

D)   provide no additional value for the analyst.


作者: spaceedu    时间: 2008-4-14 14:14

1.Harold Adams is a financial analyst reviewing the financial data for Butler, Inc., for the years 1999, 2000, and 2001. Information for several selected ratios are given below:

Table 1

Selected Data on Butler, Inc.

Ratios

2001

2000

1999

EBIT interest Coverage Ratio

19.5

17.2

13.7

EBITDA interest coverage

10.0

9.0

8.0

Funds from Operations/TD

48.0

48.0

55.0

Free Operating Cash Flow/TD

NA

NA

NA

Pretax Return on Capital

26.0

24.1

18.5

Operating Income/Sales

36.0

36.5

37.8

LTD/Capitalization

29.0

28.9

31.8

TD/Capitalization

45.0

58.0

60.2

Adams obtained Standard and Poor's information about median ratios by credit rating. These ratios are reproduced below:

Table 2

Standard & Poor's Select Median Rating Criteria

Ratios

AAA

AA

A

BBB

BB

B

EBIT interest Coverage Ratio

12.9

9.2

7.2

4.1

2.5

1.2

EBITDA interest coverage

18.7

14.0

10.0

6.3

3.9

2.3

Funds from Operations/TD

89.7

67.0

49.5

32.3

20.1

10.5

Free Operating Cash Flow/TD

40.5

21.6

17.4

6.3

1.0

(4.0)

Pretax Return on Capital

30.6

25.1

19.6

15.4

12.6

9.2

Operating Income/Sales

30.9

25.2

17.9

15.8

14.4

11.2

LTD/Capitalization

21.4

29.3

33.3

40.8

55.3

68.8

TD/Capitalization

31.8

37.0

39.2

46.4

58.5

71.4

What would most likely be the result if Butler were to provide Adams with additional 1999 data? It would:

A)   provide a stronger basis for a decision concerning the firm's rating.

B)   distort the financial trend for Butler, Inc.

C)   render the year 2001 data invalid.

D)   provide no additional value for the analyst.

The correct answer was  A)

Additional historical trend information can increase Mr. Adams' confidence in his projections for the firm's credit rating.

作者: 重耳    时间: 2009-3-24 05:15

作者: dandinghe4748    时间: 2009-5-6 15:14     标题: 回复：（spaceedu）[2008] Session 14 - Reading 55: ...

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