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Accounting/Finance Questions
Week 1 Homework
Q1.
A sole proprietorship is, in basic terms, an enterprise owned by a single person. This essentially means that an enterprise of this nature does not have partners. One advantage of such an entity is that decision-making happens to be rather fast or quick as the number of persons to be consulted are few (i.e. in comparison to a partnership). Further, given that profits are not shared, the owner gate to keep all the profits. However, one key disadvantage is that it may be difficult to raise capital in this case. Also, the personal assets of the owner could be attached incase the business is unable to settle its obligations as there exists no distinction (for legal purposes) between the business owner and the enterprise itself.
Q2.
A financing activity could be described as any business activity or transaction that involves either the borrowing, repayment, or raising of cash. With this in mind, examples of financing activities are inclusive of, but they are not limited to; getting a bank loan, issuance of common stock, issuance of dividends, etc.
Q3.
An income statement could be conceptualized as a crucial schedule of an enterprises income and expenditures. It comes in handy in...…the operations of the enterprise. However, it should be noted that unlike a sole proprietorship, decision making on this front could be slower as shareholders may have to vote on certain key decisions.
Q2.
There are three key sections of a balance sheet. These are; the assets section, the liabilities section, and the equity section.
Q3.
The current ratio, in basic terms, happens to be one of the liquidity ratios. Thus, it comes in handy in efforts to establish whether an enterprise is capable of, or has the ability to, sort its short-term debts. It is computed by dividing the current assets figure with the…
Financial Ratios: PepsiCo Financial ratios are great tools when it comes to the evaluation of the performance of a business entity. In that regard therefore, ratios are used by various stakeholder groups including but not limited to investors, suppliers, creditors, and even regulatory bodies. This text concerns itself with ratio analysis with my entity of choice being a publicly traded beverage company. For purposes of this discussion, I will concern myself
Financial Ratios There are a number of financial ratios that will be valuable to a small business person. A small business is often concerned with cash flow, so ratios that are the most concern fall into three categories -- liquidity, profitability and efficiency. Liquidity ratios measure the ability of the company to meet its upcoming financial obligations. These ratios are important for ensuring that there is enough cash on hand to
Financial Risk The financial ratio categories are Liquidity, Activity, Profitability, and Coverage (Kieso, Weygant, & Warfield, 2008). These ratios are comparisons of different financial accounts that show financial performance measures in different areas. Fluctuations of these ratios can be red flags. These fluctuations can show increases or decreases in performances. Increases could indicate growth, but decreases could show negative signs in performance levels that need to be analyzed and addressed. Liquidity,
This means that Apple is generating more cash internally than Google. Further, given the increase in cash flows from operations in the case of Apple means that the company could have an enhanced value of net income in future. When it comes to cash flows from investing activities, there is an increase in the same in the case of Apple in the current financial year in comparison to the
This ratio eliminates the stock figure from that of current assets and like the current ratio; it is used to measure the liquidity of a firm. The quick ratio may in some instances be preferred over the current ratio as it is inherently difficult to turn some assets into cash. In regard to the two companies, the quick ratio brings out Plume Inc. As being more risky as it
Financial Ratio Analysis for Xerox Xerox Corporation is company in the field of technology and services, which is currently developing, manufacturing, marketing, and financing a whole range of document equipment, software, integrated solutions and services. They have a global network, with branches in more than 130 countries all over the world. In America, its products are distributed through divisions, subsidiaries and third-party distributors. In the rest of the world (Europe, Africa,