This action might not be possible to undo. Are you sure you want to continue?
items sales on credit terms are not considered to be an inflow of cash until the actual collection of cash is received or due. The income statement uses accrual basis that accrues amounts receivable or payable in accordance to their allocated periods.
B et Cas udg hflowS tatem ent Feb Balance Brought Forward Personal Savings Cost of Racking& Equipm ent Purchase of a Ford Van Insurance for Ford Van Maintenance for Ford Van Monthly Causal Labour S alary Monthly Clerk S alary Monthly Rental Monthly Admin Cost Monthly Salary for Mr Lang Purchases of Watches Sales of Watches Balance Carried Forward B et Incom S udg e tatem ent Feb Mar Apr May Jun Insurance for Ford Van $ (22.22) $ (22.22) $ (22.22) $ (22.22) $ (22.22) Maintenance for Ford Van $ (100.00) $ (100.00) $ (100.00) $ (100.00) $ (100.00) Monthly Causal Labour S alary $ (3,000.00) $ (3,000.00) $ (3,000.00) $ (3,600.00) Monthly Clerk S alary $ (1,200.00) $ (1,200.00) $ (1,200.00) $ (1,200.00) Monthly Rental $ (800.00) $ (800.00) $ (800.00) $ (800.00) Monthly Admin Cost $ (600.00) $ (600.00) $ (600.00) $ (600.00) Monthly Salary for Mr Lang $ (1,000.00) $ (1,000.00) $ (1,000.00) $ (1,000.00) Purchases of Watches $ (4,500.00) $ (6,000.00) $ (7,500.00) $(10,500.00) Sales of Watches $ 18,000.00 $ 24,000.00 $ 30,000.00 Profit /(Loss) $ (122.22) $(11,222.22) $ 5,277.78 $ 9,777.78 $ 12,177.78 Jul $ (22.22) $ (100.00) $ (3,600.00) $ (1,200.00) $ (800.00) $ (600.00) $ (1,000.00) $ (9,000.00) $ 42,000.00 $ 25,677.78 Aug $ (22.22) $ (100.00) $ (3,600.00) $ (1,200.00) $ (800.00) $ (600.00) $ (1,000.00) $ (4,500.00) $ 36,000.00 $ 24,177.78 Sept Oct $ (22.22) $ (22.22) $ (100.00) $ (100.00) $ (3,000.00) $ (3,000.00) $ (1,200.00) $ (1,200.00) $ (800.00) $ (800.00) $ (600.00) $ (600.00) $ (1,000.00) $ (1,000.00) $ 18,000.00 $ 11,277.78 $ (6,722.22) $ $ 4,000.00 $ (900.00) $ (2,000.00) $ (200.00) $ (100.00) $ $ $ $ $ $ $ $ Mar Apr May Jun Jul 800.00 $(10,400.00) $(23,100.00) $(19,300.00) $(13,100.00) $ Aug Sept Oct 600.00 $ 30,800.00 $ 60,100.00
$ (100.00) $ (3,000.00) $ (1,200.00) $ (800.00) $ (600.00) $ (1,000.00) $ (7,500.00) $ 18,000.00 800.00 $(10,400.00) $(23,100.00) $(19,300.00)
(100.00) (3,000.00) (1,200.00) (800.00) (600.00) (1,000.00) (4,500.00)
$ $ $ $ $ $ $
(100.00) (3,000.00) (1,200.00) (800.00) (600.00) (1,000.00) (6,000.00)
$ (100.00) $ (3,600.00) $ (1,200.00) $ (800.00) $ (600.00) $ (1,000.00) $(10,500.00) $ 24,000.00 $(13,100.00)
$ (100.00) $ (3,600.00) $ (1,200.00) $ (800.00) $ (600.00) $ (1,000.00) $ (9,000.00) $ 30,000.00 $ 600.00
$ (100.00) $ (3,600.00) $ (1,200.00) $ (800.00) $ (600.00) $ (1,000.00) $ (4,500.00) $ 42,000.00 $ 30,800.00
$ (100.00) $ (100.00) $ (3,000.00) $ (3,000.00) $ (1,200.00) $ (1,200.00) $ (800.00) $ (800.00) $ (600.00) $ (600.00) $ (1,000.00) $ (1,000.00) $ 36,000.00 $ 18,000.00 $ 60,100.00 $ 71,400.00
Mr Lang would have cash flow issues in the monthly of Mar to Jun due to the monthly expenses and prior months of purchases of watch to be sold accordingly to his scheduled months of sales. To further slow down his cash inflow cycle, all the sales made were on 1 month credit terms. Mr Lang has to acquire at least additional cash flow of S$65,900 to cover for the negative cash flow in months of Mar to Jun in order to continue his operations.
as the company board of directors will decide whether or not pay out a dividend. In these instances when distributors are made. This is true during the good times when the company has excess cash and decide to distribute money in the form of dividend to its investors. . this claim is most important during times of insolvency when common stock holders are last in line for the company’s assets. The precise details as to the structure of preferred stock are specific to each corporation. meaning that if the company Page1 does miss one . Second. However. preferred stock do not fluctuate as often as company‘s common stock and can some time be classified as a fixed income security. Because of this characteristics. This is not necessarily the case for common stock. it will be required to pay it before any future dividends are paid on either stock. This mean that when the company liquidate and pay all creditors and bond holders . However. When you buy a preferred stock. Adding to this fixed income personality is the fact that the dividend are typically guaranteed .Answer 2 A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation). the dividend of preferred stock is different from and generally greater than those of common stock. Also known as "preferred shares". Preferred stock holders are different in two key aspects : First. preferred stock holders must be paid before common stock holders. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights. common stock holders will not receive any money until after the preferred share holders are paid out. preferred stock holders have a greater claim to a company’s asset and earnings. you will have an idea of when to expect a dividend because they are paid at regular intervals.
This means that common shareholders with preemptive rights have the right but not the obligation to purchase as many new shares of the stock as it would take to maintain their proportional ownership in the company. other debt holders. In addition to voting rights. zero-coupon bonds can be issued at very discount bond offers investors additional appreciation if the security is held until maturity. Also called junior equity or common stock Discount Bond A bond that is issued for less than its par (or face) value. In the event of liquidation. The "discount" in a discount bond doesn't necessarily mean that investors get a better yield than the market is offering. and entitling the holder to a share of the company's success through dividends and/or capital appreciation. common shareholders have rights to a company's assets only after bondholders. Typically. just a price below par. providing voting rights. The board of directors is the group of individuals that represents the owners of the corporation and oversees major decisions for the company. Depending on the length of time until maturity. Pre-emptive rights allow common shareholders>to maintain their proportional ownership in the company in the event that the company issues another offering of stock. In addition to semi-annual interest payments. Page1 large discounts to par. sometimes 50% or more. common shareholders receive one vote per share to elect the company's board of directors (although the number of votes is not always directly proportional to the number of shares owned).Common Shares Securities representing equity ownership in a corporation. Common shareholders also receive voting rights regarding other company matters such as stock splits and company objectives. common shareholders sometimes enjoy what are called "pre-emptive rights". or a bond currently trading for less than its par value in the secondary market. a . and preferred shareholders have been satisfied.
such as zero-coupon bonds . it does show the general relationship between bonds and interest rates. The spread used to be 2 %( 5%. if a bond with a par value of $ 1. possibly even making a play for the company's assets or equity.2%). effectively raising its yield to very attractive levels. This is because the bond is now paying more than the market rate (because the coupon rate is 5%). bonds are highly correlated to interest rates.000.3%). investors who buy into these issues become very speculative.Because a bond will always pay its full face value at maturity (assuming no credit events occur). you will able to sell the bond for a profit (or premium). however. To better explain this. When interest rates go up.000. Bonds selling more than their face value When the terms premium and discount are used reference to bonds. . discount bonds issued below par . Like most fixed income securities.will steadily rise in price as the maturity date approaches. Bonds can be sold for more than and less than par values because changing interest rates. A distressed bond (one that has a high likelihood of default) can also trade for huge discounts to par. let‘s look at an example. These bonds will only make one payment to the holder (par value at maturity) as opposed to periodic interest payments. they are telling investors that the purchase price of bond either above or below the par value.000 is selling at a premium when it can be bought for more than $1000 and is selling at a discount when it can be bought for less than $ 1. however. as many other factors Page1 involved. This is a simplified way of looking at a bond’s price. but it now increased to 3 %( 5% . a bond‘s market price fall and vice versa. If interest rates go down by 10% from the time of your purchase. because of this. For example. is that these bonds will not receive full or timely interest payments at all. imagine that the market interest rates is 30 % today and you just purchased a bond paying a 5% coupon with a face value of $ 1. The consensus.
U. These securities do not pay a coupon rate of interest. Treasury Bills are exempt from state and local taxes. Also called Bill or T-Bill or Treasury bill. Disadvantage of US Treasury Bill Treasury bonds offer a relatively low yield to maturity when compared to other investments. However. Treasury bonds are exposed to political risk. Because of their many other advantages.S. the government constantly issue new debt in order to pay off its maturing debt and the US senate must authorise the issuing of new debt. Because so much of the commerce is denominated in united states dollars. Treasuries appeal to a wide range of US investors. willing to accept a lower yield from Treasures than other bonds. government and backed by its full faith and credit. Treasury Bills are considered the safest securities available to the U. These bonds do not have traditional credit risk because the federal government can print as much as money as is necessary in order to avoid defaulting on its debts. In the event of a political dispute. it’s possible that the senate could refuse such authorisation there by causing a technical default. pension plans and individuals. having a maturity of one year or less. investors are generally.S. United States treasury securities also known as treasures are fixed income security instruments issued by U S treasury. These securities make up the largest and most important and most liquid fixed income market place in the world. The low yield to maturity refers to a bond’s rate of return (expressed as an annual rate. and so the yield on these securities are considered the risk-free rate of return. and calculating that rate of return on an annual basis. insurance companies.S. investor. Page1 . and the interest earned is estimated by taking the difference between the price paid and the par value of the bond.U S Treasury Bill A negotiable debt obligation issued by the U. Treasuries also have broad appeal among non US citizen and entities as well.) if it’s held until maturity. including bank.
47 Current ratio (2007) = 224.000÷ 122. the more liquid the company is. If current liabilities exceed current assets.000 = 1.000.000 .80 An indicator of a company's short-term liquidity. Quick ratio. lower number means weaker).000 = 1. Current ratio is equal to current assets divided by current liabilities. An indication of a company's ability to meet short-term debt obligations. then that company is generally considered to have good short-term financial strength.000 = 1. and its total current liabilities are $8.000.3000÷ 110. the higher the ratio.Answer 3 Current ratio = current asset ÷ current liabilities Current ratio (2008) = 158. which is equal to 1. Quick ratio = current asset – inventories ÷ current liabilities Quick ratio (2008) = 158. The higher the quick ratio.000.000= 1. the better the position of the company.25.41 Quick ratio (2007) = 224.000.000 . For example.000.84 A liquidity ratio that measures a company's ability to pay short-term obligations. if XYZ Company's total current assets are $10. means stronger.000÷ 110. If the current assets of a company are more than twice the current liabilities.000. is obtained by subtracting inventories from current assets and then dividing by current liabilities.000 divided by $8. then the company may have problems meeting its short-term obligations.4000÷ 122. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. then its current ratio would be $10.000. often referred to as acid-test ratio. Page1 Quick ratio is viewed as a sign of company's financial strength or weakness (higher number . XYZ Company would be in relatively good short-term financial standing.
000÷ 1458.50 Fixed asset turn over (2007) = 749.000 ÷ 1.the higher the number the better.000 = 0.net of depreciation. A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues. Fixed asset turn over = net sales ÷ net property.000.39 The amount of sales generated for every dollar's worth of assets. then quick ratio amounts to: ($15. It is calculated by dividing sales in dollars by assets in dollars.710. Since we subtracted current inventory.000. prudent investors watch this ratio in following .000. plant and equipment (PP&E) . It also indicates pricing strategy: companies with low profit margins tend to have high asset turnover.000. quick ratios vary greatly from industry to industry. This ratio is often used as a measure in manufacturing industries.000. years to see how effective the investment in the fixed assets was.000= 0. while those with high profit margins have low asset turnover.000-27.For example. it means that for every dollar of current liabilities there are three dollars of easily convertible assets. where major purchases are made for PP&E to help increase output.000 ÷ 1.000.45 The fixed-asset turnover ratio measures a company's ability to generate net sales from fixedasset investments .000= 0.000)/ $3. and current liabilities equal $3.000 = 3. however.300.44 Asset turn over (2007) = 749.934.specifically property. if current assets equal $15.27. Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue . plant.$6.000. In general. current inventory equals $6.000 .000÷1. Asset turn over = revenue ÷ asset Asset turn over (2008) = 641.000 = 0. Page1 When companies make these large purchases. a quick ratio of 1 or more is accepted by most creditors. equipment Fixed asset turn over (2008) = 641.000.000.000.
202.934.458. However. a debt ratio of less than 1 indicates that a company has more assets than debt.000 = 0.33 A ratio that indicates what proportion of debt a company has relative to its assets. the company could potentially generate more earnings than it would have without this outside financing.000 ÷1.53 A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. Debt to equity ratio = total liabilities ÷ share holders equity Debt to equity ratio (2008) = 800.55 Debt to asset ratio (2007) = 632. then the shareholders. Used in conjunction with other measures of financial health.000 0.000 = 1. This can result in volatile earnings as a result of the additional interest expense. A debt ratio of greater than 1 indicates that a company has more debt than assets. If a lot of debt is used to finance increased operations (high debt to equity). If this were to increase earnings by a greater amount than the debt cost (interest).000÷1. the debt ratio can help investors determine a company's level of risk.000 = 0.22 Debt to equity ratio (2007) 632.000÷ 1. It indicates what proportion of equity and debt the company is using to finance its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. the cost of this debt financing may outweigh the return that the Page1 shareholders benefit as more earnings are being spread among the same amount of . meanwhile.Debt to asset ratio = total debt ÷ total asset Debt to asset ratio (2008) = 800.000÷ 658.
5.24 Net profit margin (2007) = 225.50 A metric used to measure a company's ability to meet its debt obligations.company generates on the debt through investment and business activities and become too much for the company to handle. capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2. However.000 ÷ 641.000 ÷ 20.000 = 10.000÷ 30. Failing to meet these obligations could force a company into bankruptcy. which would leave shareholders with nothing. a high ratio can indicate that a company has an undesirable lack of debt or is paying down too much debt with earnings that could be used for other projects.000 = 0. while personal computer companies have a debt/equity of under 0.30 Page1 .000 = 0. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pre-tax basis. The rationale is that a company would yield greater returns by investing its earnings into other projects and borrowing at a lower cost of capital than what it is currently paying to meet its debt obligations Net profit margin = net income ÷ revenues Net profit margin (2008) = 151. It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt.000 ÷ 749. Times interest earned = earnings before interest and tax ÷ financial cost Times interest earned (2008) = 231. For example. Ensuring interest payments to debt holders and preventing bankruptcy depends mainly on a company's ability to sustain earnings.55 Times interest earned (2007) = 315.000 = 11. The debt/equity ratio also depends on the industry in which the company operates. This can lead to bankruptcy.
20 for each dollar of sales. for example.10 Return on investment 92007) = 225. This is an indication that costs need to be under better control. means the company has a net income of $0.458.934.000 ÷ 1. Profit margin is displayed as a percentage. It measures how much out of every dollar of sales a company actually keeps in earnings. it leads to a lower profit margin. Profit margin is very useful when comparing companies in similar industries. ROA for public . Imagine a company has a net income of $10 million from sales of $100 million.000 ÷ 1. If in the next year net income rises to $15 million on sales of $200 million. companies can vary substantially and will be highly dependent on the industry. the company's profit margin would fall to 7.12 An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. it has done so with diminishing profit margins. or net profits divided by sales. Looking at the earnings of a company often doesn't tell the entire story. ROA is displayed as a percentage. This is why Page1 ROA tells you what earnings were generated from invested capital (assets). a 20\% profit margin. Calculated by dividing a company's annual earnings by its total assets. For instance.5%. but an increase does not mean that the profit margin of a company is improving. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. if a company has costs that have increased at a greater rate than sales.000 = 0. giving it a profit margin of 10% ($10 million/$100 million). So while the company increased its net income. Sometimes this is referred to as "return on investment". Return on investment (asset) = net income ÷ total asset Return on investment (2008) = 151. Increased earnings are good.000 = 0.A ratio of profitability calculated as net income divided by revenues.
The ROA figure gives investors an idea of how effectively the company is converting the money it has to invest into net income. but very few managers excel at making large profits with little investment. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock.000 = 0. if another company earns the same amount but has total assets of $10 million. Anybody can make a profit by throwing a ton of money at a problem.23 Return on equity (2007) = 225. it is best to compare it against a company's previous ROA numbers or the ROA of a similar company. Return on equity = net income ÷ share holder’s equity Return on equity (2008) = 151. it has an ROA of 10%. management's most important job is to make wise choices in allocating its resources.202. The higher the ROA number. The assets of the company are comprised of both debt and equity. the first company is better at converting its investment into profit. if one company has a net income of $1 million and total assets of $5 million. its ROA is 20%.000 = 0. however. Based on this example.) Shareholder's equity does not include preferred shares Page1 There are several variations on the formula that investors may use: .19 The amount of net income returned as a percentage of shareholders equity.000 ÷ 1. the better. Both of these types of financing are used to fund the operations of the company.when using ROA as a comparative measure. because the company is earning more money on less investment.000÷ 658. When you really think about it. For example.
giving the following: return on common equity (ROCE) = net income preferred dividends / common equity. Investors wishing to see the return on common equity may modify the formula above by subtracting preferred dividends from net income and subtracting preferred equity from shareholders' equity.12 Average daily rate (2007) = 749.000 / 365) ÷ 59 = 61% Occupancy percentage (2007) = (9.950 = 75.950 / 365) ÷ 59 = 46% Average daily rate = room revenue ÷ number of rooms sold Average daily rate (2008) = 641. Occupancy percentage = room sold ÷ number of rooms available Occupancy percentage 92008) = (13.000 ÷ 13. Investors may also calculate the change in ROE for a period by first using the shareholders' equity figure from the beginning of a period as a denominator to determine the Beginning ROE.050. 2. Return on equity may also be calculated by dividing net income by average shareholders' equity. the end-of-period shareholders' equity can be used as the denominator to determine the ending ROE.050 = 49.1. Then. Average shareholders' equity is calculated by adding the shareholders' equity at the beginning of a period to the shareholders' equity at period's end and dividing the result by two.000 ÷ 9. 3. Calculating both beginning and ending ROEs allows an investor to determine the change in profitability over the period.28 REVPAR = average daily room rate × occupancy rate Page1 .
24 0.77 2008 1.30 0.45 0.39 0. It may also be calculated by dividing a hotel's total guestroom revenue by the room count and the number of days in the period being measured.41 0.80 0.50 0.78 Answer 4 Analysis of 2008 vs 2007: Fiscal ratio Current ratio Quick ratio Asset turn over Fixed asset turn over Debt to asset ratio Debt to equity ratio Times interest earned Net profit margin Return on investment (Asset) Return on equity Occupancy percentage Average daily rate REVPAR 1.50 0.84 1.44 1.46 75.12 0.10 0.28 *0.19 0.53 10.61 =29.23 0.22 11.44 0.55 0. which is calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate.46 =34.61 49.78 2007 Page1 .A performance metric in the hotel industry.55 1.28 34. Revpar (2008) = 49.12 29.12 * 0.33 0.77 Revpar (2009) = 75.
30 9.A lower ROI of 0.Lower quick ratio of 1.80 3.39.22 generally means it has been aggressive in financing its growth with debt.41% Page1 .44 reflects a better efficiency of generating more revenue with its assets than 2007 of 0.23 in 2008 reflects that more income is generated for its equity and its consider better than 2007 of 0. 5.55 reflects that the company is more dependent on the on its liabilities to fund its assets and has a higher level of financial risk as compared to 2007 of 0.84 2.24 in 2008 reflects a lesser earning power as compared to 2007 of 0.41 in 2008 reflects a lesser liquidity to pay back its current liabilities as compared to 2007 of 1.Higher Times interest earned in 2008 of 11. 4.44 in 2008 reflects a heavier liability cost to pay and a poorer ability to pay them.Lower current ratio of 1.33 6.A higher debt/equity ratio in 2008 of 1.45.10 in 2008 reflects a lower generation of revenue earned on its assets and is not favourable as compared to 2007 of 0.19. This can result in volatile earnings as a result of the additional interest expense as compared to 2007 of 0.12 10. 8.A Lower Net profit margin of 0.5 reflect a better efficiency of generating more revenue with its fixed assets than 2007 of 0.Higher Asset turnover in 2008 of 0.53 7. Answer 5 Value on common stock = Dividend ÷ stock price + growth rate = $12 ÷ $27 + 8% = 15.Higher fixed assets turnover in 2008 of 0.Higher ROE of 0.1. as compared to 2007 of 1.Higher Debt to assets ratio in 2008 of 0.55 indicate that it has an undesirable lack of debt or is paying down too much debt with earnings that could be used for other projects.
060.986.06×$45. After knowing that we would need to pay $12. From this formula. you will pay $12986.000 ÷ 1.000 ×7%) + 0.207906 = $12.06) – 4 = $2. I = 4%) ×maturity = 5.157.060(the interest rate at the time of the payment).62 a year for 4 times . 1 times a year.986. I = 4%) × interest +PVIF (n = 6years. You will have 1× 4 = 4 total payments to make. interest amount and principal amount in a schedule for reference Page1 .62.25 Answer 7 ( I ) Amortize the loan Your annual interest rate converted to a decimal 6% ÷ 100.62 Where I = 0. The interest rate at each payment is 0.000 = $1.00 = 0. and N = 4 the number of periods).Answer 6 Value of coupon bond = PVIFA (n = 6years.(1+1) – N = 0.7903× $1.0 = 0. we can put the payment amount .( 1+ 0.7000÷ 0.2421× ($1.06% ÷ 1.0600 You can calculate the amount of each payment using this formula Payment = I × amount ÷ 1.
521.57) = $23.986.211.286.80 $1.918.104.22.168 .($12.251.809.53= $0 The loan is fully paid.62 ( third payment) .190.713.000.428.700.00 Page1 .09 Payment to principal $10.713.38 .38) = $34.62 $12.62 Payment to interest $2.428.558.986.62 $2.986.$735.946.($12.251.00 $61.809.62 = $34.903.986.00 $21.53 (amount of outstanding loan left) Year 4: $12.09 ( interest 6% on $12.251.$10.57 (Interest 6% on $23.000.809.57 $12.Year 1: $45.700(interest) = $45.62( second payment ) .809.000 .713.81 $11.$2.53 $0.286.986.81= $23.286.38 – ( $12.$11.082.43 $4.$10.700.986.53 Total paid Total paid Left topay to principal to interest $10.713.748.57 (amount of outstanding loan left) Year 3: $23.57.53) = $12.80 (Interest 6% on $34.04 = $12.082.809.62( first payment ) .903.713. With reference to schedule Payment Payment number Year 1 Year 2 Year 3 Year 4 amount $12.47 $34.62 $12.57 $735.38 ( amount of out standing loan left) Year 2: $34.00 $2.04 $12.558.$1.47 $6.62 $12.38 $45.$12.80 $32.38 $23.782.251.986.251.($12.57.62( fourth payment).$12.62 $10.
for combination of those for the refinancing of the loan. for business the amortization schedule can offer essential data foe the forecasting. while if we make them on the latest years they have almost zero impact. 4. because will take the amount of interest paid as a deduction to your income taxes. 3. when it comes to real estate or business loan the rate of interest and the exact amount of money you pay for interest are very important . There could be included extra payment. here the taxes. Page1 . 2. Having this schedule you can also find your equity if you have a RE loan or a car debt. you want know exactly what your credit balance is. 5. different duration and changed interest rates. In order to keep a business profitable we should avoid financial surprises. all you have to do is to estimate the current value of your property.Answer 7( ii) 1. the amount of principal to loan payment can be real revelation. expenses including. loan amortization schedule can be done for many different options to know exactly how the loan term and pay off would be changed. We all know that the extra payment in the early year of the loan have a huge impact on the duration of the loan .
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.