Questions from Financial Markets

Q: What is cost-volume-profit analysis? How can it

What is cost-volume-profit analysis? How can it be used by a firm?

Q: What is the purpose of knowing the break-even point?

What is the purpose of knowing the break-even point?

Q: What will happen to the break-even point if the contribution

What will happen to the break-even point if the contribution margin rises (falls)?

Q: What does a firm’s degree of operating leverage (DOL) indicate

What does a firm’s degree of operating leverage (DOL) indicate?

Q: Describe what would happen to the DOL if all costs are fixed

Describe what would happen to the DOL if all costs are fixed? Variable?

Q: What is ratio analysis? Also briefly describe the three basic categories

What is ratio analysis? Also briefly describe the three basic categories or ways that ratio analysis is used.

Q: Identify the types of ratios that are used to analyze a firm’s

Identify the types of ratios that are used to analyze a firm’s financial performance based on its income statements and balance sheets.

Q: Which type or category of ratios relates stock market information to financial

Which type or category of ratios relates stock market information to financial statement items?

Q: What do liquidity ratios indicate? Identify some basic liquidity ratios.

What do liquidity ratios indicate? Identify some basic liquidity ratios.

Q: 1. How is the dollar return for a stock over a

1. How is the dollar return for a stock over a given period computed? a. Change in price plus dividends received b. Last period’s price minus current price c. Last period’s price minus current pric...