Sample Essay

Return on Equity

The debt equity ratio for the company in 2001 was at 2.84, and the return on assets ratio at 1.1%. The return on equity ratio stood at 14.0% with the interest coverage in 2001 was 1.6. In 2003, the year of the merger, the debt equity ratio for the company was at 3.93, and the return on assets ratio at 1.5%.

The return on equity ratio stood at 22.4% with the interest coverage in 2003 was 2.5. Two years after the merger, the debt equity ratio for the company in 2004 was at 4.51, and the return on assets ratio at 1.3%. The return on equity ratio stood at 16.2% with the interest coverage in 2004 was 1.9.

 

Operating Cash Flows & Absolute Cash Flows

The cash flow statement for 2001 depicted cash flows from operating activities to be $(13,618)m. The net cash flow for investing activities stood at $38,559m, with the net cash flow form financing activities recorded at $(25,560)m. The cash flow from operating activities in 2003 was at $24,313, with the investing activities at $(73,425)m and the financial activities at $51,048m. Two years after the merger, in 2005, the cash flow from operating activities was at $(12,223)m, and the net cash flow from investing at $(150,445)m and $170,817m from financing activities. The total net cash flow for 2001, 2003 and 2005 were $(676)m, $2,111m & $8,063m respectively.

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