uop acc291 week 4 all discussions [ total 3 ]

Week Four Discussion Questions

·
Why are companies required to
prepare a statement of cash flows? Why is the statement of cash flows divided
into three sections? What does each section tell you about a company’s operations?

·
What are some common ratios
used to analyze financial information? Which are the most important? What are
some examples of how ratios are used in the decision-making process?

·
Two popular methods of
financial statement analysis are horizontal analysis and vertical analysis.
What are the differences between these two methods?

·
What are the differences
between the direct and indirect presentation of cash flows? Why does the
Financial Accounting Standards Board allow both methods? Which do you prefer?
Why?

·
Why must preferred stock
dividends be subtracted from net income in computing earnings per share? Why is
common stock usually not issued at a price that is less than par value?

What three conditions must exist before a cash
dividend is paid? Contrast the effects of a cash dividend and a stock dividend
on a corporation’s balance sheet.