For questions 1, 2, and 3 each of your answers should be approximately 1 to 1.5 pages per questions answered. Use double-spacing, conforming to APA format. You should cite the textbooks as appropriate in your answers. For questions 4, 5, and 6 show your computations/provide explanations so if you have an incorrect answer I can see where the mistake occurred. Answer questions concisely and to the point for the computations.

1) What does analyzing companies against their industry tell a finance manager or financial analyst about the health and success of own company? Furthermore, what does analyzing a company against firms in OTHER industries tell a finance manager or financial analyst about their own company?

2) How can effective communication of budgetary and financial management data help managers and leaders make better overall decisions that affect the entire organization across all sectors--public, private, and nonprofit?

3) Annual stockholders reports are required by the Securities and Exchange Commission (SEC) to provide stockholders a summary and documents the firms financial activities during the past year. In addition, near the end of each quarter, many companies unveil their quarterly performance. Firms that beat analyst estimates often see their share prices jump, while those that miss estimates by even a small amount, tend to suffer price declines. The practice of manipulating earnings in order to mislead investors is known as earnings management.

• Why might financial managers be tempted to manage earnings?

4.Using the below income statement, calculate the gross profit, operating profit, and net profit margins (show your work) and answer why trend analysis is important in sound financial management in 2-4 sentences. Cite appropriately if outside sources are used.

Income (sales, revenue)	20,000,000
-COGS (cost of goods sold)(variable costs)	12,000,000
Gross Profit	8,000,000
-Operating expenses (fixed expenses)	4,000,000
-Depreciation Expense(Note)	1,000,000
Operating profit or EBIT (earnings before int. & tax)	3,000,000
-Interest	100,000
EBT (earnings before tax) Use for tax calc	. 2,900,000
-Taxes owed	870,000
EAT (earnings after tax) or net profit or net income	2,030,000