What is an ideal utilization? Can utilization ever be greater than 100 percent? Explain. | Homework.Study.com (2024)

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• How do we use the gross profit percentage to evaluate business performance?
• In finance, what does the term "optimal" mean?
• Define capacity utilization.
• What is the meaning of an optimal capital budget? Explain.
• Briefly explain what is Benchmarking and how is it used?
• What are component percentages? Why are they useful?
• Describe how you would use a level and a chase demand capacity utilization strategy.
• What are the advantages and disadvantages of using labor utilization as a performance measure? Do these same arguments apply to machine utilization?
• What is a necessary condition for usefulness of a ratio of financial numbers? Explain.
• Identify a financial ratio that can be used to analyze financial statements for financial planning, and explain how it can be used efficiently.
• Is it true that the investment with the highest growth percent is always the best performing? Explain.
• What is the pure play approach to determining the appropriate discount rate? When might it be used?
• Why do percentage change calculations end up being rather confusing on occasion?
• What is weighted average cost of capital, how is it used, and when is it not appropriate to use?
• How do we use the current ratio to evaluate business performance?
• Which ratio can be easily identifiable to maximize the value of a firm?
• How does informational efficiency compare to operational efficiency?
• Why isn't maximizing profits an equally significant objective? Explain.
• What empirical evidence supports the usefulness of the top-down approach?
• In practice, how can a firm determine whether it is operating at (or near) its optimal capital structure?
• Under what circ*mstance might the validity of comparative ratio analysis be questionable?
• What is operating leverage? How if at all, is it similar to financial leverage? If a firm has high operating leverage, would you expect it ot have high or low financial leverage? Explain your reasonin
• Explain what is meant by a firm's optimal capital structure.
• How do you use the debt ratio to evaluate business performance?
• What is meant by unbundling? How might this lead to more economic efficiency and less risk in the financial system? How do economies of scale fit in? Explain.
• How do we use the times-interest-earned ratio to evaluate business performance?
• Does high operating leverage always mean high business risk? Explain.
• Explain how a percentage return is calculated, and describe the calculation of an arithmetic average return.
• State true or false and justify your answer: Asset utilization ratios can be used to measure the effectiveness of a firm's managers.
• Discover what is meant by "superplasticity" and explain how it can be used to advantage?
• State true or false and justify your answer: Asset utilization ratios describe how capital is being utilized to buy assets.
• What is an overhead consumption ratio?
• Explain what it means that a financial market is efficient.
• You are convinced that capacity utilization next year will decline from 82% to about 79%. Explain what effect this change will have on the operating profit margin.
• Explain in detail the advantages of using Cost-Volume-Profit Analysis.
• Explain maximizing vs satisfying.
• What are financial ratios and why are they useful?
• What is the rationale for using the price/book value ratio as a measure of relative value?
• What does the gross profit percentage measure, and how is it calculated?
• How could you increase labor productivity, without increasing labor utilization?
• Explain the factors that influence the optimal cash level for a business.
• Define or describe the following: Optimal portfolio.
• Define or describe the following: Cost effectiveness analysis.
• How might you personally use comparative data to improve your performance in your organization?
• What determines the optimum level of government debt?
• What is better for the profit margin ratio - a high number, low number or somewhere in between?
• Explain why profit maximization is not the best goal for a company.
• Explain what is meant by "market efficiency." What are the characteristics of an efficient market?
• Explain why a higher Debt Service Coverage Ratio (DSCR) is preferable from the debt position lender's perspective.
• Current ratio is particularly useful in what?
• Define an efficient market and explain how it differs from a perfect market.
• How do we use the asset turnover ratio to evaluate business performance?
• What is a Comparative Balance Sheet? What are its objectives and advantages? Explain the procedure to prepare Comparative Balance Sheet.
• How does the asset utilization ratio for a bank compare to that of a retail company? How do the... How does the asset utilization ratio for a bank compare to that of a retail company? How do the equit
• a. What are the three benefits of ROI? b. Explain how each benefit can lead to improved profitability.
• What tells us the composition of the optimal portfolio from a theoretical standpoint?
• Explain in detail the disadvantages of using Cost-Volume-Profit Analysis.
• Describe some instances when deter-mining the present value of an amount is useful.
• Describe what are the three types of efficiency and mention why they are important to understand modern finance.
• What is meant by useable vs. rentable space?
• Explain what is meant by the Rule of 72. How can it be used in finance applications?
• Discuss financial ratios and their usefulness, and then explain what to do if they do not necessarily follow the company or industry norm.
• As it would be shown on a comparative income statement, what is the change in percentage for gross profit?
• What is the percentage of sales forecasting method? What are some of the limitations financial analysts should be aware of in applying this method?
• What does it mean, for a financial market, to be considered (a) informationally efficient, and (b) economically efficient?
• 1. What is the operating leverage effect and what causes it? 2. What are the potential benefits and negative consequences of high operating leverage?
• a. What is leverage? b. How is it measured? c. Is it better to have more or less leverage?
• "Please also explain meaning of 'P/E ratio' and 'div yield'. How are they counted?"
• Explain the new debate on maximizing vs satisfying.
• What is the maximum potential profit of your strategy? Provide a full breakdown of how to find the answer.
• What is meant by a unit of comparison? Why is it important?
• What is an advantage of the accounting rate of return?
• Take 2 of the ratios that are underperforming and explain what may be some of the possible reasons and how they can improve their performance. Ratio Actual Benchmark Variance Current Ratio 1.42 2.2 0.
• Define target payout ratio and optimal dividend policy.
• How would one explain a low receivables turnover ratio?
• What is the percent increase for revenues which have grown from $150 (million) last year to $200 (million) this year?
• What conditions would help make a percent-of-sales forecast almost as accurate as pro forma financial statements and cash budgets?
• As it would be shown on a comparative income statement, what is the change in percentage for research?
• Explain how net profit differs from gross profit and operating profit.
• In the context of Finance, what does it mean to maximize the value of a corporation?
• Define or describe the following: Efficient frontier.
• a. What is the basic advantage of depreciation? b. All else the same, would a firm generally prefer to depreciate an asset as fast as possible, or not as fast as possible? Why?
• The goal of the financial manager in a profit-seeking organization is to maximize what?
• What is the optimum value of a capital budgeting technique? What effect should the best (most effective) technique have? What are the most prevalent techniques used? Their strengths and weaknesses?
• To be considered a great impact on a government budget, what percent of that budget would a specific category need to comprise?
• Quincy is convinced that capacity utilization next year will decline from 82% to about 79%. Explain what effect that only this change will have on the operating profit margin.
• List and define the three major electronic-based payments, giving the usage occasions, advantages, and disadvantages of each.
• Define the following term: Gross profit.
• As it would be shown on a comparative income statement, what is the change in percentage for provision for taxes?
• What purpose does performance appraisal serve? Why are there so many methods of appraisal?
• Why may averaging percentage changes produce an inaccurate measure of the true rate of return?
• What is the significance of the P/E ratios for investors? Explain.
• What variables affect the aggregate operating profit margin, and how do they affect it?
• What must be present for there to be a difference between the minimum exchange ratio and the maximum exchange ratio?
• What is the calculation for the debt ratio? Explain what the debt ratio evaluates.
• Why is a higher NPV conceptually better than a lower one?
• What is a grace period? How can you use it to your advantage?
• What is the basic calculation of financial leverage? Provide examples.
• Why is profit maximization, by itself, an inappropriate goal? What is meant by the goal of maximization of shareholder wealth?
• Semi-strong-form informational efficiency implies what?