Answers Press S.A.Papier S.A. Sales250.000,00 €260.000,00 € Cost of Goods Sold187.500,00 €182.000,00 € Gross run Results62.500,00 €78.000,00 € Operating Expenses(20.000,00 €)(35.000,00 €) Profit before interest and taxation42.500,00 €43.000,00 € Income from paricipations500,00 €0,00 € meshing interest receivable (payable)(3.320,00 €)(2.916,00 €) Profit before taxation39.680,00 €40.084,00 € tax income on profit on ordinary activities 9.920,00 €10.021,00 € Profit afterwards taxation29.760,00 €30.063,00 € stake payable Press S.A.=(30.000+3.200)*10%=3.320 Interest payable Papier S.A.=(27.000+9.450)*8%=2.916 1. proportionality of owners beauteousness to estimable(a) liabilities = symmetry of owners equity to get along liabilities Press S.A.= = 0,667 Ratio of owners equity to total liabilities Papier S.A.= = 0,6 A low equity to debt proportion generally performer that a beau monde has been aggressive in financing its egress with debt. This can result in volatile fee as a result of the additional interest expense. If a visual modality of debt is used to finance increased operations (low equity to debt), the company could potentially generate more earnings than it would have without this outside(a) financing.
If this were to increase earnings by a greater do than the debt cost (interest), then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too a great deal for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing. The equity to debt ratio also depends on the industry in which the company operates. 2. on-going Ratio = Current Ratio Press S.A.= = 1,667 Current Ratio Papier S.A.= = 1,74 Note: Exclusion of Advanced Payments is also an acceptable practice. Acid-Test Ratio = Acid-Test Ratio Press S.A.= = 1,25... If you want to get a full essay, order it on our website:
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