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I have attached the guideline and key points. Would need a detailed answer to this question. Thanks! (b) Give examples of financial ratios and explain
I have attached the guideline and key points. Would need a detailed answer to this question. Thanks! (b) Give examples of financial ratios and explain how they allow us to assess the current economic performance of a company. (10 marks) (c) Is the intrinsic valuation of a firm's equity affected by accounting choices made by analysts? Explain. (5 marks) (b) Here it is probably safest to give examples across a range of profitability, liquidity, solvency, efficiency and other ratios, to explain how one might use them, and how they might be interpreted in different ways. It is only a more complete set of ratios which allows us to put together a coherent assessment. (c) This is a question about mathematical equivalence and accounting bias. Candidates can use examples such as depreciation regimes or intangible assets to illustrate, and if you can think of some simple nunerical illustrations, then this may be helpful. Unless unrecognised bias skews our forecasts, accounting choices will have no effect on the valuation. They will, however, affect performance ratios
I have attached the guideline and key points. Would need a detailed answer to this question. Thanks!
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