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Which ratios would banker is most interested while considering whether to approve an application for short-term business loan? Describe.Bankers and other lenders employ liquidity ratios to distinguish
Why do analysts compute financial ratios? Ratios are comparative measures. Since the ratio illustrates relative value, they let financial analysts to compare information which could not be compa
Describe financial ratio? This is a number which expresses the value of one financial variable relative to another. Put more cleanly, a financial ratio is the result you obtain when you divide one fin
Why do financial managers compute the marginal tax rate?Financial managers utilize marginal tax rates to estimate the future after tax cash flows from investments. Because they are interested in
How do financial managers compute the average tax rate?Average tax rates are calculated through dividing tax dollars paid by earnings before taxes (EBT).
State three major sections of the statement of cash flows? Cash flows from investing activities Cash flows from Operations Cash flows from financing activities Net change in cash balance Cash b
Describe accumulated depreciation?Depreciation is the allocation of an asset's primary cost over time. Accumulated depreciation is the sum of all the depreciation cost that has been identified to date
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Clarify retained earnings? Describe importance of this? Retained earnings represent the sum of all the earnings available to common stockholders of a business at the time of its entire history,
Describe depreciation expense as it seems on the income statement. Accounting depreciation is the allocation of asset's primary cost over time. Depreciation cost on an income statement is the am
State time dimensions of the income statement, the balance sheet, and the statement of cash flows? Describe. The income statement is such as a video: This measures a firm's profitability on a
Why do overall assets equal the sum of total liabilities and equity? Describe. Assets = Liabilities + EquityAssets are the items
Compare and contrast a prescribed benefit and contribution pension plan.In a prescribed benefit plan, retirement benefits are determined by a formula that typically considers the worker's age, salary,
Which kind of insurance company usually takes on the greater risks: a life insurance company or a property and casualty insurance company? The risks sheltered against by property and casualty companie
Describe who owns a credit union? Credit unions are owned through their members. While credit union members put money in their credit union, they are not "depositing" the money technically. In s
Compare and make mutual and stockholder-owned savings and associations of loan. Some savings and loan associations are owned through stockholders, just as commercial banks and other corporations are o
What are a bank's main reserves? Vault cash & deposits in the bank's account at the Fed are utilized to satisfy these reserve requirements; they are termed as primary reserves. These primary
What can a financial institution frequently do for a deficit economic unit (DEU) which it would have complexity doing for itself if the DEU were to deal directly with an SEU?SEUs typically desire to s
What can a financial institution frequently do for a surplus economic unit which it would have complexity doing for itself if the surplus economic unit (SEU) were to deal directly along with a deficit
Explain intermediation.The financial system makes it achievable for surplus and deficit economic units to come together, exchanging funds for securities, to their mutual profit. While funds flow from
Describe Treasury bill? How risky is it?Treasury bills are short term debt instruments issued through the U.S. Treasury which are sold at a discount and pay face value at maturity. They are very
Describe the role of a broker within security transactions? How are brokers compensated?Brokers handle orders to purchase or sell securities. Brokers are agents who work in support of an investor. Whi