Calculate price earnings ratio and payout ratio, Accounting Basics

Discuss and give reasons why a business would act in a socially responsible manner.

Part A:

 'Two of the key accounting reports available to users of accounting information are the income statement and the cash flow statement'.

a)  Explain the fundamental difference between an income statement and a cash flow statement.

b)  Why do decision-makers need both reports? Explain.

Part B:

a)   Explain why debt is a riskier form of finance for a business than equity.

b)   In relation to short-term liquidity explain:

i)    What the operating cycle is.

ii)   Why it is important.

c)     How does the quick asset ratio differ from the current ratio? Explain.

Part C:

The information below is available for two companies who are both listed on the stock exchange.

 

Black Ltd

Grey Ltd

Dividend payout ratio

80%

25%

Price earnings ratio

12:1

15:1

Explain in your own words what each of:

a)   The dividend payout ratio

b)   The price earnings ratio

is intended to measure (do not just give the formula for the ratio) and, discuss what the ratio results reveal about the differences between the two companies to a potential investor.

Posted Date: 3/19/2013 3:34:39 AM | Location : United States







Related Discussions:- Calculate price earnings ratio and payout ratio, Assignment Help, Ask Question on Calculate price earnings ratio and payout ratio, Get Answer, Expert's Help, Calculate price earnings ratio and payout ratio Discussions

Write discussion on Calculate price earnings ratio and payout ratio
Your posts are moderated
Related Questions
__________ accounts show the amount of money owed to the firm by customers. A. Supply B. Prepaid C. Receivables D. Payables

How to prepare the worksheet  Look carefully at worksheet in the text. Remember that it is an informal working paper used to prepare financial statements. Place transparenci

what is the accounting?

Q. FIFO under periodic inventory procedure? The FIFO (first-in, first out) method of inventory costing suppose that the costs of the first goods purchased are those charged to

What is the accounting equation?

One or more phases in the operation cannot supply all the items it makes concurrently.

in cash flow statement, deductions from cash expences and payments to creditor. how do you get this answer

Ask question Discuss the export financing under the deferred payment system.#Minimum 100 words accepted#

introduction,features,objectives,types of branches,difference between branches and departments