Assignment

  

Answer the following questions. Each answer should be at least 250 words ( 2pages).

1. Analyzing financial statements involves the comparison of a firm’s performance with that of other firms in the same industry. It also involves the evaluation of trends in the firm’s financial position over time. Discuss how three steps in a good financial statement analysis would be necessary for a new firm.

2. a. Define free cash flow and explain its uses in a company;

b. Explain: i) Market Value Added (MVA); ii) Economic Value Added (EVA)

3.  Discuss three of the following statements in a financial statement and report: 

A) Balance Sheet; 

B) Income Statement;

C) Statement of Retained Earnings; 

D) Statement of Cash Flows.

4. A. Define free cash flow and explain its uses in a company; B. Explain how a company embarks on proper cash flow analysis.

5. A. Explain in detail the relationship between risk and return. B. Discuss what distinguishes a stand-alone risk from a portfolio risk. Explain: i) expected rate of return; ii) probability; iii) diversifiable risk; iv) market risk