The financial statements are considered to provide important information for the users of financial information. However, users must require certain skills to understand the information contained in the statements and the interpretations of the information may be worthless if it cannot provide any insight or predictions of future performance.

In one of the discussion sessions with your colleagues, your team have identified some issues on how investors view your company. After a long brainstorming session, your team came out with the following items to be presented to the manager.

• Investors gives high importance on the liquidity levels of a company. The company currently have a fluctuating liquidity position.
• The company must find the right moment to announce dividends. A mistake will negatively affect the share values.
• The bonds of the company were not priced at its best value to attract investors. The coupon rate of the bonds is considered to be less appealing than the ones offered by the market.

After presenting the list to the manager, he as very impressed with your team analysis. However, he needs more explanation and clarification on how the liquidity levels, dividends bond values and bond rate works. Therefore, he asked you to provide details on why such event occurring and suggestions on how to make improvements.