Financial Management - 4 Essays

Financial Management – 4 Essays

1. Describe how you would use a large number of ratios to perform a complete ratio analysis of a firm. Discuss the pros and cons of these ratios

2. How are total risk, nondiversifiable risk, and diversifiable risk related? Why is nondiversifiable risk regarded as the only relevant risk? Do you agree that this is correct?

3. Discuss NPV and IRR. Does the assumption concerning the reinvestment of intermediate cash inflow tend to favor NPV or IRR? In practice, which technique is preferred and why?

4. What is the difference between the firm’s operating cycle and its cash conversion cycle? Which would be more important to you as an owner and why?