Question
1. Explain how financial indicators related to liquidity, asset management, debt management, profitability, and market value can support decision-making by managers, shareholders, and commercial banks.
1. Explain how financial indicators related to liquidity, asset management, debt management, profitability, and market value can support decision-making by managers, shareholders, and commercial banks. (10 points) 2. Explain the effect of the increase in the company's debts on the Return on Assets (ROA) and Return on Equity (ROE) indicators. (Value: 6 points) 3. Argue how the analysis of asset and inventory turnover can help improve the operational performance of a company. (Value: 4 points) 4. Assuming that the Health Company is not in optimal fiscal health, explain how Return on Equity (ROE) can help justify dividend payments to shareholders and the increase in company debt. (Value: 6 points) 5. If the company Liver Corporation has a lower price/earnings (P/E) ratio than another company engaged in the same activity, what reasons could explain these differences? (Value: 4 points) 6. Describe at least three problems that arise in the analysis of financial indicators. (Value: 6 points) 7. Explain how the DuPont equation can help analyze the company's results. (Value: 4 points)
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How Financial Indicators Support DecisionMaking Liquidity Measures a companys ability to meet shortterm obligations Managers use it to manage cash flow shareholders assess risk and banks evaluate loan ...Get Instant Access to Expert-Tailored Solutions
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