1. The practice of financial statement analysis is to analyse the information produced periodically by companies from the accounting and management systems. Discuss how the investor uses this information in making informed decision about investment decisions?
2. Return on equity and return on assets are both profitability measures. Describe why these measures are particularly important to investors in making decisions to invest.
3. The debt-to-equity (or D/E) ratio is a measure of financial risk. Discuss why this measure may be of concern to an investor?
4. Financial reports contain a mix of both market values and book value. Discuss two reasons why the book value of equity can be substantially different from the market value of equity?