Question;Week Four Discussion Questions;?;Why are companies required to;prepare a statement of cash flows? Why is the statement of cash flows divided;into three sections? What does each section tell you about a company?s operations?;?;What are some common ratios;used to analyze financial information? Which are the most important? What are;some examples of how ratios are used in the decision-making process?;?;Two popular methods of;financial statement analysis are horizontal analysis and vertical analysis.;What are the differences between these two methods?;?;What are the differences;between the direct and indirect presentation of cash flows? Why does the;Financial Accounting Standards Board allow both methods? Which do you prefer?;Why?;?;Why must preferred stock;dividends be subtracted from net income in computing earnings per share? Why is;common stock usually not issued at a price that is less than par value?;What three conditions must exist before a cash;dividend is paid? Contrast the effects of a cash dividend and a stock dividend;on a corporation?s balance sheet.
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