Question

1)D01 Financial Statement Analysis

Discuss you approach to a sound and meaningful financial statement analysis. Be detailed and specific as to what you would do and what data you would represent. answer must be 500 words.

2) D02 Stock Valuation

What are some of the key elements of valuing common stocks? What are the most critical and why?answer must be 500 words.

3)Long term Investment and Asset Growth

What are the key considerations used by the CFO in determining how to finance the firm's long term investment and asset growth.? answer must be 900 words.

Answer 1

1. Financial statement analysis is a way of determining the financial statement data so that the forecast may be made of future earnings, profitability and the ability to pay the debts of the company be it present or any future debts that the company is willing to pay. For analysis of financial statements various methods such as comparative method, ratio analysis, working capital etc should be used. For financial analysis company’s financial statements are required.

2. Stock valuation: common stock are the no of equity shares in a company. They are the part of the companies wealth that is distributed to sifferent shareholders. Equity shareholders are also known as stock holders. Comon stock holders are the owners of the company who are entitled to profits in the form of dividend.

3. If the firm has the capability to take the burden of additional interest liability, then it should go for debt financing and invest its own fund at better places but if the firm feels that it will not have enough profits to bear the interest cost, then the firm should go for internal financing