Please respond with at least five sentences to each question
Question 1. How can firms in some industries receive a positive response from analysts and investors with return on assets (ROA) of 1 percent, while in other industries, an ROA of 10 percent is required?
Question 2. How would one determine the viability of a company by looking at its financial statements over a given period of time?
Question 3. How would a period of significant inflation affect the analysis of financial statements? (historical costs)
Question 4. In examining the financial statements of a company, you notice that inventories are carried on a LIFO basis. Why would a firm choose LIFO over FIFO?
Question 5. Why, in finance, are cash flows, as opposed to accrual accounting, used in determining the efficacy of a project?
Question 6. How does the use of common-sized statements increase the efficiency of the financial analyst?