$1\mathrm{.}6$ Price Earnings Ratio

$1\mathrm{.}7$ Market$-$to$-$Book Ratio

$1\mathrm{.}8$ Dividend Yield

Question $2$

$[25$ Marks$]$

$2\mathrm{.}1$

Name the four major financial statements and describe the purpose of each in details.

$2\mathrm{.}2$

Why is it preferable to compare ratio's calculated using financial statements that are dated at the same point in time during the year?

Question $3$

$[35$ Marks$]$

$3\mathrm{.}1$

Company A has a ROA of $9\%$ and a ROE of $13\%.$ Company B has a ROA of $8\%$ and an ROE of $16\%.$ What does this tell us about the relative levels of debt financing between these two companies? Which company's approach is better?

$(20)$

$3\mathrm{.}2$

From the perspective of management, what is the primary objective of financial statement analysis? What are some difficulties management might encounter in doing a complete