Choose one out of the 6 questions below. Explain your response in a paragraph or two:
1. What are the major sources of financial information for publicly owned corporations?
2. The higher the accounts receivable turnover rate, the better off the company is. Do you agree? Why?
3. Can you think of a situation where the current ratio is very misleading as an indicator of short-term, debt-paying ability? Does the acid-test ratio offer a remedy to the situation you have described? Describe a situation where the acid-test ratio does not suffice either.
4. Through the use of turnover rates, explain why a firm might seek to increase the volume of its sales even though such an increase can be secured only at reduced prices.
5. Indicate which of the relationships illustrated in the chapter would be best to judge:
The short-term debt-paying ability of the firm. The overall efficiency of the firm without regard to the sources of assets. The return to owners (stockholders) of a corporation. The safety of long-term creditors' interest. The safety of preferred stockholders' dividends.
6 Cite some of the possible deficiencies in accounting information, especially regarding its use in analyzing a particular company over a 10-year period.
Licenses and Attributions CC licensed content, Shared previously
Accounting Principles: A Business Perspective. Authored by: James Don Edwards, University of Georgia & Roger H. Hermanson, Georgia State University. Provided by: Endeavour International Corporation. Project: The Global Text Project . License: CC BY: Attribution
"Financial Statement Analysis Essay" by Gary E. Ford, ACCT 102 Principles of Accounting, Tompkins Cortland Community College is licensed under CC BY 4.0
1. What are the major sources of financial information for publicly owned corporations?
2. The higher the accounts receivable turnover rate, the better off the company is. Do you agree? Why?
3. Can you think of a situation where the current ratio is very misleading as an indicator of short-term, debt-paying ability? Does the acid-test ratio offer a remedy to the situation you have described? Describe a situation where the acid-test ratio does not suffice either.
4. Through the use of turnover rates, explain why a firm might seek to increase the volume of its sales even though such an increase can be secured only at reduced prices.
5. Indicate which of the relationships illustrated in the chapter would be best to judge:
The short-term debt-paying ability of the firm. The overall efficiency of the firm without regard to the sources of assets. The return to owners (stockholders) of a corporation. The safety of long-term creditors' interest. The safety of preferred stockholders' dividends.
6 Cite some of the possible deficiencies in accounting information, especially regarding its use in analyzing a particular company over a 10-year period.
Licenses and Attributions CC licensed content, Shared previously
Accounting Principles: A Business Perspective. Authored by: James Don Edwards, University of Georgia & Roger H. Hermanson, Georgia State University. Provided by: Endeavour International Corporation. Project: The Global Text Project . License: CC BY: Attribution
"Financial Statement Analysis Essay" by Gary E. Ford, ACCT 102 Principles of Accounting, Tompkins Cortland Community College is licensed under CC BY 4.0