What is meant by maximizing owner’s equity value (shareholder
wealth)? Why are maximizing just net income, or just profit,
inappropriate goals? (10 points)
Why do financial managers and investors find cash flows to be
more important than accounting profit? (10 points)
What information does time series analysis provide for firm
managers, analysts, and investors? (10 points)
Define the following ratios and explain their significance. (30
points)
Quick ratio
Average collection period
Return on equity
Debt ratio
Profit margin