# Calculating ratio analysis and discounted interest rates

Question

1.    (a) Define the quick ratio (i.e., acid-test ratio) and return on equity ratio, and state what these financial ratios measure.
(b) State what financial management problem each of these financial ratios could be used to identify.  (c) Could the optimal value of a financial ratio for a firm be different in different years? Explain.

2.    Calculate the present value of a bond that pays a coupon rate of 4% per year for 15 years, and matures in 15 years at its face value of \$1000, using each of the following current market interest rates as the discount rate: (a) 2%; (b) 4%; (c) 7%. Show your calculations.

Summary

These two questions belong to finance and they are about ratio analysis and discounted interest rates. The first question is about various financial ratios like quick ratio, return on equity ratio, etc. the second question is about discounted interest rates. For the second question’s answer, please refer to the Excel sheet.

Total Word Count 451

• Rasha

this is a very good website

• maani

I have 50 questions for the same test your page is showing only 28

• joeanne

• joeanne

hi can anyone help or guide me to my assignments. thanks

• Monik

• Cristina

This solution is perfect ...thanks

• Janete

Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

• Sandeep

Perfect bank of solution.

• Oxana

great !

• Paul Brandon-Fritzius

thanks for the quick response. the solution looks good. :)

• tina Johnson

thnx for the answer. it was perfect. just the way i wanted it.

• Giuseppe

works fine.