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Step 1: Calculate Equity Value 4,000,000 Shares x $21 = $84,000,000 Equity Step 2: Calculate Book Value of Assets Book Value = Asset Value - Liabilities Value 125M - 75M = 50M Book Value of Assets Step 3: Calculate the market to book ratio M:B Ratio: Equity Value/ Book Value 84,000,000/50,000,000 = 1.68 times
Study with Quizlet and memorize flashcards containing terms like Which one of the following statements concerning liquidity is correct? A) Liquid assets generally earn higher rates of return than fixed assets. B) If you can sell an asset next year at a price equal to its actual value, the asset is highly liquid. C) Liquid assets are defined as those assets obtained within the past year. D) The ...
Study with Quizlet and memorize flashcards containing terms like Highly liquid assets:, illiquid assets, How are assets listed on the balance sheet? and more.
- Cash Equivalents
- Non-Liquid Assets
- The Bottom Line
Cash equivalents are typically investments that have short-term maturities of less than 90 days. Examples of cash equivalents include: 1. Stocks and marketable securities that can be converted to cash in a relatively short period in the event of a financial emergency 2. U.S. Treasuriesand bonds 3. Mutual fundsin which money from various investors i...
Non-liquid assets are those that can be difficult to liquidate quickly. Land and real estateinvestments are considered to be non-liquid assets because it can take months or more for an individual or a company to receive cash from the sale. Suppose a company owns real estate and wants to liquidateit because it has to pay off a debt obligation within...
A liquid asset can be sold quickly, and its value doesn't drop when converted to cash. Examples include cash and its near equivalents, such as stocks and bonds. An illiquid asset, on the other hand, is the opposite, such as real estate, art, and antiques.
- Steven Nickolas
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Jun 9, 2016 · Because the value of liabilities is constant, all changes to assets must be reflected with a change in equity. This is also why all revenue and expense accounts are equity accounts, because they represent changes to the value of assets. Common line items in the equity section of the balance sheet include: Common stock; Preferred stock; Treasury ...
Dec 22, 2020 · Least Liquid Assets. Noncurrent assets are the least liquid assets because it takes longer to sell them. They include equipment, buildings and trademarks. Measuring Financial Liquidity. The concept of liquidity requires a company to compare the current assets of the business to the current liabilities of the business.
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Jul 4, 2024 · This is because the assets remaining after paying the first two categories are proportionally distributed among common shareholders. 4. Highly Liquid . The common shares issued by organizations, which comprise the share capital, are highly liquid assets, which implies that these assets can easily be converted into cash.
