What can be said about a firm whose owners’ equity is a negative amount? How could such a situation come about?

Q: Is it feasible for a new company endeavor to be lucrative while also experiencing financial…

A: Introduction: According to Entrepreneur, it takes a minimum of three years for a company to become…

Q: What interpretation can be made from this equity figure? a.It is a negative figure, so…

A: Here discuss about the details of the decision to make whether the business entity are in the…

Q: you

A: Financial hardships Financial hardship refers to a situation in which a company cannot make payments…

Q: xplain what is meant by the term ‘financial distress’. If we assume that financial distress exists,…

A: Explain what is meant by the term ‘financial distress’ Answer: Meaning of  'Financial distress' -…

Q: What are the options available to a company in the event of a financial failure?

A: Overspending and a more considerable degree of illiquid assets might lead to the firm's financial…

Q: What does a negative value for unlevered free cash flow imply for the claimants of a firm

A: Unlevered free cash flow for a company is that free cash flow which is determined and computed…

Q: What were the direct and indirect costs of the LIBOR scandal for Barclays? Are these costs only a…

A: The LIBOR Scandal: The LIBOR Scandal came to light in 2012 when Barclays and other banks admitted…

Q: A firm cannot maintain a return on common equity less than the required rate of return and stay in…

A: Required rate of return is the minimum return rate which is accepted by the shareholders for the…

Q: risk implications of improving net profit margin to increase Return on Equity?

A: Net profit margin is the percentage of net profit to sales revenue

Q: Which of the following could be the reason for the capital increase of a collective company? A) The…

A: Collective company- A collective business system, also known as a collective business model, is a…

Q: What can be stated about a business with negative owner equity? How did this scenario get to be this…

A: Investors utilize owner equity to assess the financial health of a firm. The amount that…

Q: is it possible for a company to expand itself out of existence, and how can this be avoided as a…

A: Introduction : When a company goes out of existence and shuts down its operations, it is stated that…

Q: Which of the following is not a financing decision?   A   Should the firm borrow money from a…

A: Financing decisions- It is concerned with the quantum of funds to be raised from the various…

Q: What can go wrong with financial leverage? Should it be used at all by a business?

A: Financial leverage refers to a term that tells us the use of money which one borrowed means the debt…

Q: Although the equity method is a generally accepted accounting principle (GAAP), recognition of…

A: The equity method has been criticized due to the fact that it allows the investors to recognize the…

Q: equity does not represent the market value of the company

A: There are various methods of arriving at a fair valuation of a company. Each of the methods give us…

Q: Is it possible for a company to show positive net income and still go bankrupt?

A: Bankruptcy is a process in which corporations or individuals who are unable to pay their debts and…

Q: Which of the following statements is​ FALSE? A. Equity cost of capital is normally higher then…

A: The Modigliani Miller propositions: In their paper on Capital Structure, Modigliani and Miller (MM)…

Q: How can a company expand itself out of existence, and how can this be avoided as a financial…

A: Introduction: Finance managers are accounting professionals who are concerned with the financial…

Q: . CALCULATE the value of the firms when dividends are not paid

A: Information Provided: Cap rate = 10% Outstanding Shares = 10,000 Price (P0) = $100 Dividend = $5 Net…

Q: How will a company view working capital – positive, negative, or a necessary evil?

A: The difference between current assets and current liabilities is used to calculate working capital.…

Q: The use of financial leverage by the firm has a potential impact on which of the following?…

A: Financial leverage refers to the use of debt capital in the capital structure of the company. The…

Q: In a practical sense, what signs would a CFO look for to determine if his/her firm was using too…

A: Leverage: Leverage is amount of debt the company takes to rind its business. The leverage can be…

Q: How banks can improve their return on equity and what are its negative externalities.

A: RoE is ubiquitous in banks, serving as both an indicator of overall performance and a means of…

Q: According to Modigliani and Miller, what happens to the cost of equity when the firm increases its…

A: Equity financing is the process of raising money from the investors and give ownership to the equity…

Q: Why would a company choose to factor itsreceivables, given that it will get less money than…

A: Sales means delivery of goods and services by the seller. It can be for cash sales or sales made on…

Q: Which of the following is a valid reason for a firm not to use as much debt as it can raise? Group…

A: The use of more debt results in an increase in the firm's cost of capital as the proportion of…

Q: What is the implication of managerial entrenchment: should company favor debt or equity? Why?

A: Managerial entrenchment theory-says that allotment of shares inside the organization such as…

Q: Which of the following can impose serious economic consequences on a businessman? O a. Having more…

A: Sole proprietor or businessman has a disadvantage of unlimited liability under sole proprietorship…

Q: What may be stated about a business whose equity is negative? How did such a scenario arise?

A: Investors use shareholders' equity, which is shown on a company's balance sheet, to assess a…

Q: Would a firm that has many good investment opportunities be likely to have ahigher or a lower…

A: We can measure the average worth of the company through dividend value. The dividend payout ratio is…

Q: What are the disadvantages of the financial intermediaries and the negative ways they can impact the…

A: A financial intermediary is that entity that acts as a middleman in a financial transaction taking…

Q: Firm may invest heavily, but that investment while producing earnings may not add value if operating…

A: The objective of establishing a company is to earn profits and grow wealth by selling one or a…

Q: What is causing the volatility for this company? Is anything in this statement unusual or concerning…

A: when analysing the company financials it is important to consider the every variables as it affect…

Q: How does the equity method discourage the manipulation of net income by investors?

A: Equity method is used for accounting for investments by one company in another company when the…

Q: Examine the key reasons why a business may not want to hold too much or too little working capital.…

A: The key reasons why a business wants to hold efficient working capital is discussed below:…

Q: True of False? Contributed capital decreases when the company has a net loss. If your answer is…

A: Net income is an excess of revenue over expenditure and Net loss indicates that there are more…

Q: Although the equity method is a generally accepted accounting principle (GAAP), recognition of…

A: Equity Income This is the amount earned through stock dividends  by  investors on dividend-paying…

Corporate Ethics

Ethics refers to the moral values and principles that guide an individual. Corporate ethics refers to the moral behavior of a company and its employees while conducting business. Business ethics is another name for corporate ethics. Business ethics reflects the purpose of doing the business. Business ethics is the distinction between what is right and wrong in the workplace and the selection of the right set of actions. Every corporate entity follows business ethics to a large extent in order to survive and compete successfully in the market. Corporate entities that strictly adhere to business ethics gain the trust of their stakeholders and thus gain more customers. An organization follows compliance, i.e., following certain business policies, rules, procedures, and practices to deal with the problem arising from the business environment. Business ethics also ensures that they meet compliance requirements as it was connected with the activities of an organization.