Oracle Microsoft Notes: Comparison between the two companies' ratios Earning per share As given in the income statement $1.69 $2.73 Cannot compare due to a different amount of shares outstanding. Current ratio Current assets $39,174 = 2.76 $74,918.00 = 2.60 Current liabilities $14,192 $28,774.00 Gross Profit Ratio Gross profit amount $442 = 1.2% $1,637 = 2.3% Microsoft Sales (13940) - cost of revenue
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decided to concentrate on financial ratio analysis, since I am the business owner, and most of the financial terms like balance sheet, shareholder’s equity, EBITDA, EBITDAM, financial ethics, financial benchmarking I am very familiar with. I must admit that understanding financial ratio analysis I found somehow difficult, this is why I decided to concentrate on this topic. Summary of Articles The first article that I read is called “Financial Ratios, Discriminant Analysis and the Predictions
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A Report on Ratio Analysis of BRAC Bank 1.0 Introduction 1.1 Origin of the Report To be an efficient business executive, a student of business study must have practical knowledge about the financial activities of any business organization. Financial Management (FIN 301) course is giving the theoretical knowledge of financial management activities but only theoretical knowledge cannot make students efficient. Ms. Nasreen Sultana, course instructor for this course gave an assignment on 28 November
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Profitability Ratios 1)ROCE: (prime ratio) basic measure of firm performance Ebit/Ta-CL 20% satisfactory. Investors can judge whether the investment is worthwhile. If low markets-sales decline, unit costs increased. Need to increase net profits without increasing cap. Employed. Reduce cost maintain sales Gross Profit Margin: Gross Profit/ Sales Revenue the higher the GPM the better Net Profit Margin Efficiency Ratios: operating performance including profit AVG A/R settlement = A/R
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Gi ng d y Kinh t Fulbright 2007-08 Phân tích tài chính Bài 6 2.2.1 T s thanh kho n T s thanh kho n là t s ño lư ng kh năng thanh toán n ng n h n c a công ty. Lo i t s này g m có: t s thanh kho n hi n th i (current ratio) và t s thanh kho n nhanh (quick ratio). C hai lo i t s này xác ñ nh t d li u c a b ng cân ñ i tài s n, do ñó, chúng thư ng ñư c xem là t s ñư c xác ñ nh t b ng cân ñ i tài s n, t c là ch d a vào d li u c a b ng cân ñ i tài s n là ñ ñ xác ñ nh hai lo i t s này. ð ng
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A Summary of Key Financial Ratios How They Are Calculated and What They Show Profitability Ratios 1. Gross profit margin Sales - Cost of goods sold Sales An indication of the total margin available to cover operating expenses and yield a profit. 2. Operating profit margin (or Return on Sales) Profits before taxes and interest Sales An indication of the firm's profitability from current operations without regard to the interest charges accruing from the capital structure 3. Net profit margin
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Financial Ratios Julian Rodriguez FIN/370 November 15, 2012 Dr. Yvan Nezerwe FINANCIAL RATIOS Financial ratios are very helpful to everyone from business manages to individuals. For example, managers use financial ratios to monitor inventory, help make decisions on what products a company should produce. They also help to determine if a person will be approved for a loan. There are many financial ratios used in financial management these ratios include liquidity ratios, capital structure
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| Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | Dec 31, 2009 | Dec 31, 2008 | Turnover Ratios | | | | | | Inventory turnover | 8.35 | 8.68 | 8.07 | 4.03 | 11.02 | Receivables turnover | 4.77 | 4.95 | 4.64 | 3.41 | 5.39 | Payables turnover | 13.83 | 17.58 | 16.84 | 11.44 | 27.58 | Working capital turnover | 3.89 | 3.84 | 3.57 | 2.21 | 4.17 | Average No. of Days | | | | | | Average inventory processing period | 44 | 42 | 45 | 91 | 33 | Add: Average receivable collection period
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A Summary of Key Financial Ratios How They Are Calculated and What They Show Profitability Ratios 1. Gross profit margin Sales - Cost of goods sold Sales An indication of the total margin available to cover operating expenses and yield a profit. 2. Operating profit margin (or Return on Sales) Profits before taxes and interest Sales An indication of the firm's profitability from current operations without regard to the interest charges accruing from the capital structure 3. Net profit margin
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The Sharpe Ratio and the Information Ratio Sharpe Ratio and Information Ratio used to determine the risk-adjusted return of an investment portfolio. Sharpe Ratio The Sharpe Ratio introduced a method of assessing manager performance relative to risk taken. Sharpe Ratio centres on the use of a RFR, this places all mangers on a level playing field regardless of style. (Expected Portfolio Return – RFR) / Portfolio Standard Deviation Hypothetically, investors should always be able to invest
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Ratio Formula Current Assets Current Liabilities Short term Investments Current Receivables Current Liabilities Net sales Average accounts receivable Cost of goods sold Average inventory 365 365 Net Sales Average total assets Total liabilities Total assets Total equity Total assets Total liabilities Total equity Income before interest expense and income taxes Interest Expense Net Income Net Sales Cost of goods sold Net Sales Net Income Average total assets Net
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years, particularly because of the state of the economy. However, financial ratios can be beneficial in helping a company regain its financial standing while pointing out its strengths and weaknesses. These ratios offer a summarized analysis of a company’s financial progress in its respective industry. There are a number of financial ratios that can be used to help measure a company’s progress, such as current ratio, debt ratio, profit margin, and return on assets. Riordan Manufacturing and Kudler Fine
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of FDI means that it is "exporting money" to "buy" or "build" foreign productive capacity, whose ownership will remain in the first country's hands. For a country, attracting an inflow of FDI strengthen the connection to world trade networks and finance its development path. However, unilateral massive FDI to a country can make it dependent on the external pressure that foreign owners might exert on it. COMPOSITION FDI has following three components: 1. Equity Capital: Invested money that, in
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Market Intermediaries like Brokerage Houses, Merchant Banks etc.; Micro Finance Institutions (MFIs). The semi formal sector includes those institutions which are regulated otherwise but do not fall under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange Commission or any other enacted financial regulator. This sector is mainly represented by Specialized Financial Institutions like House Building Finance Corporation (HBFC), Palli Karma Sahayak Foundation (PKSF), Samabay
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STATEMENTS OF HOTEL LEELA VENTURES TABLE OF CONTENTS :: 1) INTRODUCTION TO HOTEL INDUSTRY 2) PROFILE OF HOTEL LEELA VENTURES LTD. 3) OBJECTIVE OF ANALYSIS AND METHODOLOGY 4) FINANCIAL ANALYSIS USING RATIO ANALYSIS 5) INTERPRETATIONS OF THE RATIOS 6) RECOMMENDATIONS 7) REFERENCES INTRODUCTION TO HOTEL INDUSTRY Over the last decade and half the mad rush to India for business opportunities has intensified and elevated
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The most comprehensive form of gearing ratio is one where all forms of debt - long term, short term, and even overdrafts are expressed as a percentage of the total assets of the company.The calculation is as follows: * Long-term debt + Short-term debt + Bank overdrafts X 100 Shareholders' equity+Long-term debt + Short-term debt + Bank overdrafts Sainsbury’s gearing ratio for 2013 was 55% compared to 67% for Tesco. This meet that out of every £1 of the assets of Sainbury, 55 pence is financed
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Activities Ratios | 2012 | 2011 | 2010 | Total Current Asset | 11,267,000 | 4,604,000 | 2,246,000 | Net Receivables | 1,170,000 | 547,000 | 373,000 | Inventory | - | - | - | Total Asset | 15,103,000 | 6,331,000 | 2,990,000 | Total Liability | 3,348,000 | 1,432,000 | 828,000 | Total Shareholder's Equity | 11,755,000 | 4
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RATIO ANALYSIS Meaning and definition of ratio analysis: Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements so that the strength and weaknesses of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two variables. Significance or Importance of ratio analysis: • It helps in evaluating the
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Ratio | Calculation | Explanation | ROSReturn on Sales | Net Income / Sales | A measure of how much profit was created for every dollar of sales | Turnover(asset turnover) | Sales / Total Assets | The total sales generated in a particular year divided by the value of total assets for the same periodMeasures the amount of “activity” taking place in a business (how active the assets are in generating sales)The higher the use of these assets (ex: plant & equipment), the higher the level of this
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| |Working Capital | |Working Capital is more a measure of cash flow than a ratio. The result of this calculation must be a positive number. It is calculated | |as shown below: | |Working Capital = Total Current
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Gearing Ratio: The ratio measures the level of indebtedness of the company against the company’s equity.PG is highly geared having slided by 37% to 79% in year 2012 compared to 42% in year 2011. Debenture holders finance 79% of the company’s equity leaving the shareholders with only 21%. The implications of high gearing at Mazuru Company is that it is increasing the cost of borrowing ( Finance charges) thereby affecting profitability. If the trend continues and the company fails to pay up
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Ratio and Financial Statements Analysis Kimberly Y. Gruber University of Maryland University College Dr. Sunando Sengupta 07/25/2013 Turnitin Score: 23% Executive Summary The purpose of this paper is to examine ratio and financial statement analysis. Such analysis is a useful tool for managers and stakeholders to evaluate a company’s financial health in order to identify opportunities for growth and areas of weakness so as to institute corrective measures. Financial statements are used
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accounting ratios can be used to monitor the financial performance of the organisation. Ensure you provide examples and use the correct data from the case study To Pass this criteria students must: * Explain what specific areas each individual ratio measures providing specific examples and data from the case study * Identify at least 2 things that the ratios can be measured against to assess a business’s performance. * Explain why it is valuable for a business to measure each ratio in improving
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Ratio analysis meaning and its importance There are various analysing financial tools in an organization to analyse financial statement among them ratio analysis is also one. It is a very important tool which helps to analyse the monetary issues of the business in order to make proper financial decision within a specified period of time. Thus ratio analysis is a technique of financial analysis that determines trends and exposes strength and weakness of the firm with meaningful comparisons. Some
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decisions regarding the operations of the firm. RATIO ANALYSIS: Fundamental Analysis has a very broad scope. One aspect looks at the general (qualitative) factors of a company. The other side considers tangible and measurable factors (quantitative). This means crunching and analyzing numbers from the financial statements. If used in conjunction with other methods, quantitative analysis can produce excellent results. Ratio analysis isn't just comparing different numbers
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An important aspect of financial statements is using ratios for comparison purposes. The ability to analyze ratios allows stakeholders to compare against time periods or benchmark against other organizations. “The five major classes of financial statement ratios are common size, liquidity, solvency, efficiency, and profitability” (Finkler & Jones, p.117, 2007). This paper will summarize common financial ratios and will provide examples of ratio analysis from Hospital Corporation of America’s (HCA)
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Aftab Automobiles Limited Dividend Policy |Year |Earning per (EPS)share |% Cash |% Stock dividend |Dividend per share (in|Pay out ratio | | |(in taka) |dividend (in Dividend| |taka) | | |2005 |86 |20 |- |20 |23.26% | |2006 |28 |20
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Current ratio Shinepukur: From 2009 to 2010, current ratio of Shinepukur has increased by 0.24 because of increase in total current assets and decrease in total current liabilities. The increase in total current has occurred for increase in accounts-and-other-receivables, advances-deposits-and-prepayments and cash. Among these elements, the increase in advances-deposits-and-prepayments is significant (from 82182270 to 278773841). On the other hand, the element that has decreased total current liabilities
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Ratios and Formulas in Customer Financial Analysis Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial
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The solvency ratio indicates whether a company’s cash flow is sufficient to meet its short-term and long-term liabilities. The lower a company's solvency ratio, the greater the probability that it will default on its debt obligations. The measure is usually calculated as follows: Solvency ratio, with regard to an insurance company, means the size of its capital relative to the premiums written, and measures the risk an insurer faces of claims it cannot cover. The solvency ratio is only one of
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IMPORTANT; Project Finance Coverage Ratios DS = Interest Payment + Principal Repayments due on a given date CADS = Cash Available for Debt Service CADS equals to pre-tax operating income plus interest income from reserve account minus mandatory capital expenditure minus investment in net working capital minus required contributions to reserve accounts. Note: Depreciation & amortisations should be added back to net operating income. Indirect taxes should also be subtracted
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Ratio, Vertical and Horizontal Analysis The three tools of the financial statement analysis are ratio, vertical and horizontal. Vertical analysis also known as common size analysis expresses each line on a single years financial statement as a percent of a one line item. Horizontal analysis is the process in which dividing each expense item of a given year by the same expense item in the base year. It will then allow changes in the expense item over time. Ratio analysis is a form that is used
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Questions on Ratio Analysis A: Multiple Choice Questions 1. Which of the following is considered a profitability measure? a. Days sales in inventory b. Fixed asset turnover c. Price-earnings ratio d. Cash coverage ratio e. Return on Assets 2. Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Both firms have a total debt ratio (D/V) equal to 0.8. Firm A has an asset turnover ratio of 0.9, while firm B has an asset turnover ratio equal
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increase more than the cost. Thus, gross profit increase. * More efficient in terms of cost and operating expense and finance cost. (Reductions) * Fully utilized resourcers – hire competent workers,etc - reduce cost * Finance cost reduce – In 2012, they buy another $200m of bank loan which has 10% of interest. However, due to the overdraft of 126-120 = 6. Their current finance cost is 20-6 = 14. Thus there is changes in the EBT – cost reduce * Sales increase 8% more than the market share
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BUS350: Principles of Finance August 20, 2015 Choose one of the ratios presented in the readings and apply research material to the discussion of that ratio. Businesses come in different sizes with different growth capacities. It would be difficult to compare financial statements of two companies, in the same industry, that are of varied proportions. Financial ratios allow a more simplified calculation of measure to compare these business entities. “Financial ratios are relationships
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| Timo Salmi, Jussi Nikkinen &Petri Sahlström Department of Accounting and Finance Faculty of Business Studies University of Vaasa, Finland The Review of the Theoretical and Empirical Basis of Financial Ratio Analysis Revisited With the Modern Developments in the Web-Based Publishing Abstract This web-based publication is an addendum to a previous review of the research and research trends in financial ratio analysis. The first purpose is to add more current references to the previous review
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Letter of Transmittal 30th November 2015 Assistant Professor of Finance Subject: Term paper on Financial Ratios Analysis of ACI Ltd. Dear Sir, We would like to thank you for giving me the opportunity of doing this assignment on this subject to prepare term paper . This task has been given us the opportunity to explore one of the most important aspect of ACI Ltd which is known as “Financial Ratios Analysis of ACI Ltd”. The term paper contains a comprehensive study on financial aspects
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A Report on the Ratio Analysis of Lafarge Surma Cement Ltd. Date of submission: 18/08/2015 Course: FIN254.15 Prepared for: Ahmed Ameya Prapan Lecturer, School of Business, North South University. Prepared By: Ifraha Fairuz Binte Ilias ID# 142 0352 030
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|FINAL PROJECT RATIOS | LIQUIDITY AND ACTIVIY Current Ratio measures the ability of a firm to pay its short-term debts. The formula is: |Current Ratio |= |Current Assets | | | |Current Liabilities
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key ratios used in analytical procedures at both the audit planning stage and when collecting audit evidence. RELEVANT to ACCA QUAlification paper F8 In the Paper F8 exam you may be asked to compute and interpret the key ratios used in analytical procedures at both the audit planning stage and when collecting audit evidence. Ratios and comparisons can be used to identify where the accounts might be wrong, and where additional auditing effort should be spent. Calculating a ratio is easy
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following ratios according to a ratio category (liquidity ratio, asset management ratio, debt management ratio, profitability ratio, or market value ratio). a. Current ratio – liquidity ratio b. Inventory turnover ratio – asset management ratio c. Return on assets – profitability ratio d. Accounts payable period – asset management ratio e. Times interest earned – debt management ratio f. Capital intensity ratio – asset management ratio g. Equity multiplier – debt management ratio h. Basic
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10 RATIOS YOU MUST KNOW Liquidity Ratios Current (working capital) ratio Acid-test (quick) ratio – Cash flow liquidity ratio Accounts receivable turnover Number of days’ sales in accounts receivable Inventory turnover – Total assets turnover 651 10 RATIOS YOU MUST KNOW Equity (Long-Term Solvency) Ratios Equity (stockholders’ equity) ratio – Equity to debt 10 RATIOS YOU MUST KNOW Profitability Tests – Return on operating assets Net income to net sales (return on sales or “profit
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Profitability ratios measure the company's use of its assets and control of its expenses to generate an acceptable rate of return Gross margin, Gross profit margin or Gross Profit Rate[7][8] [pic] OR [pic] Operating margin, Operating Income Margin, Operating profit margin or Return on sales (ROS)[8][9] [pic] Note: Operating income is the difference between operating revenues and operating expenses, but it is also sometimes used as a synonym for EBIT
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Chique Ltd – Ratio Analysis Ratios One of the best ways to explain financial ratios is to go through them as an example. The following example provides a set of financial accounts for Chique Ltd. from which you are going to calculate important ratios. The Company Chique Ltd is a small company that buys and sells Chinese Antiques. The company employed 14 staff in 2004 which increased to 18 in 2005. All sales and purchases are made on credit. What’s required Chique Ltd is going
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[pic] (A Term Paper submitted as a partial requirement for the fulfilment of the course FB-507; Managerial Finance; in the Department of Banking, University of Dhaka) Department of Banking [pic] Ratio Analysis & Trend Analysis Submitted by Muzahidur Reza Chowdhury EMBA program, 18th batch Department of banking University of Dhaka Department of Banking [pic] Letter of Transmittal December 22, 2011 To Md. Muzahidul Islam Professor, Department of Banking
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Journal of Economics, Finance and Administrative Sciences ISSN 1450-2275 Issue 11 (2008) © EuroJournals, Inc. 2008 http://www.eurojournalsn.com The Usefulness of Corporate Governance and Financial Ratios to Credit and Financial Analysts: Evidence from Bahrain Jasim Al-Ajmi Department of Economics and Finance, College of Business Administration University of Bahrain, Bahrain Tel: +973-39444284; Fax: +973-17449776 E-mail: jasimalajmi@gmail.com Abstract Financial ratios provide useful quantitative
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|Stock Price 52-week low | |$2.5 |$4.89 |$1.6 | |P/E Ratio |P/E ratio Industry average | |n/a |20.25 | |% Public
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Activity ratio 1.Total asset turnover : Total sales or revenue/Total assets Year 2006 2007 2008 2009 2010 Total sales/revenue 7,760 8,615 10,225 12,317 12,323 Total assets 35,974 46,864 62,269 76,139 82,729 Total asset turnover 0.22 0.18 0.16 0.16 0.15 Year 2006 2007 2008 2009 2010 Total sales/revenue 7,760 8,615 10,225 12,317 12,323 Total assets 3,382 4,637 7,205 8,741 12,356 Total asset turnover 2.29 1.86 1.42
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The use of Financial Ratios for Research: Problems Associated with and Recommendations for Using Large Databases Introduction The use of financial ratio analysis for understanding and predicting the performance of privately owned business firms is gaining in importance in published research. Perhaps the major problem faced by researchers is the difficulty of obtaining an adequate sample of representative financial statements with many studies using 50 or fewer firms for analysis. However
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The Use of Ratio Analysis Ratio analysis is a tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis to judge the performance of the company. Analyzing ratios is used to evaluate a company's
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