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
What is Beer direct materials and raw materials? Raw materials are the basic materials and parts that are to be used in the manufacturing process Raw materials that can be ph


State about the Cash payments journal A special journal used to record any payment of cash. There would be a check number given to be recorded in journal as well. Source docume

Required: Record the following transaction on the spreadsheet, total each column a. Issued 100 shares of common stock for $12 per share, par=$1, on Jan 15, 2011. b. On Feb. 5 pu

Illustrate the structure of brain Brain is capable of changing its structure in numerous ways. Synapses become stronger and denser. Tiny blood vessels increase in size and numb

Define Accounting. Briefly explain the accounting concepts which guide the accountant at the recording stage.

using the break-even equations to solve for price and variable cost per unit andromeda company's break-even point is 2,400 units. variable cost per unit is $42; total costs are 6

Explain the term- Depreciation This is a term which is used to describe the expense which results from loss of usefulness of an asset because of age, wear and tear, and obsoles


Invoice is a text which haves the under mentioned details compulsorily. 1. Invoice Number 2. Name and address of the person 3. Invoice date Name and address of someone