The first topic for this week is The Importance of Financial Markets and Institutions. Chapter 3 in the textbook states that all large corporations must use financial markets and institutions for the financing they need to grow. If the corporation has a surplus of cash and no need for financing, they have to invest the cash, for example, in bank accounts or in securities.The first video "An Introduction to Financial Markets" outlines the reasons for and uses of financial markets. Watch the video and then in your own words compare its definition of a financial market to the textbook's definition and give the functions of financial markets versus the functions of financial institutions. The second video "Ratio Analysis" discusses a few of the financial ratios that we will be covering in Chapter Two -Analysis of Financial Statements. There are four types of ratios: Profitability, Efficiency, Leverage, and Liquidity. Financial Managers and analysts have to condense an enormous volume of information in a company's financial statements. To do this, they rely on a handful of ratios to summarize financial performance, operating efficiency, and financial strength.

After watching the video, please state in your own words why ratio analysis is so important when analyzing a company's financial performance. Post your comments on both "Financial Markets and Ratio Analysis". The posting should be less than 200 words. your words and experiences from a personal basis.

watch the below videos

YouTube URL:http://www.youtube.com/watch?v=6OoMQiClXCs

YouTube URL:http://www.youtube.com/watch?v=LfQSPgtBAUg