Questions from Financial Markets

Q: General accounting practice is based upon the accrual concept. Explain what

General accounting practice is based upon the accrual concept. Explain what this means and briefly describe how this compares with the financial manager’s focus on cash.

Q: What is the purpose of the income statement? Also, briefly

What is the purpose of the income statement? Also, briefly identify and describe the major types of expenses that are shown on the typical income statement.

Q: What is the purpose of the balance sheet? Briefly identify and

What is the purpose of the balance sheet? Briefly identify and describe the major types of assets and the claims of creditors and owners shown on the typical balance sheet.

Q: List some reasons why financial statement analysis is conducted. Identify some

List some reasons why financial statement analysis is conducted. Identify some of the participants that analyze firms’ financial statements.

Q: Describe the Du Pont method or system of ratio analysis. What

Describe the Du Pont method or system of ratio analysis. What are the two major components of the system?

Q: How is the Du Pont system related to both the balance sheet

How is the Du Pont system related to both the balance sheet and the income statement?

Q: How is the process of financial planning used to estimate asset investment

How is the process of financial planning used to estimate asset investment requirements?

Q: Explain how internally generated funds are used to reduce the need for

Explain how internally generated funds are used to reduce the need for external financing to fund asset investments.

Q: 1. A market that can absorb large trades without large security

1. A market that can absorb large trades without large security price movements is said to have which of the following? a. Depth b. Breadth c. Electronic trading d. Many traders 2. A market with...

Q: Explain how financial planning is used to determine a firm’s external financing

Explain how financial planning is used to determine a firm’s external financing requirements.