why do firms use non financial measures

Q: What’s the risk of competition on financial markets and institutions profitability?

A: Competitive risk or Risk of Competition is the force that will hinder the organization in achieving…

Q: One of the indirect costs of financial distress is having to sell assets at lower than market value.…

A: Indirect costs of financial distress is not the directly present cost in the financial statements…

Q: Why should the managers make investment decisions on the basis of cashflows rather than profits?

A: Net income: The bottom line of an income statement which is the result of excess earnings from…

Q: How can inflation affect the comparability of financial ratios between firms? Explain your answer

A: Introduction: Usually, inflation is nothing but an increase in prices of most regular or widely used…

Q: Is it financial expediency for firms to borrow?

A: The acquisition of debt funds by businesses is far more convenient than any form of funds and far…

Q: what is financial leverage and its implications for company performance?

A: Company borrow amounts to buy assets and do business.

Q: The financial leverage implications for company performance?

A: Financial Leverage means the inclusion of debt in the company's capital structure. Debt is used to…

Q: How is it possible for a firm to grow itself out of business and how can this be guarded against as…

A: Finance managers are accounting experts concerned for a company or organization's financial…

Q: Can a company be profitable but not liquid? Explain.

A: Liquidity: It can be defined as the ease or quickness with which the short term assets of a company…

Q: What is a firm’s business risk? operating leverage? How does the operating leverage affect the…

A: A business can be defined as the entity or organization established to earn profit by providing…

Q: How does extent of rivalry among competitors affect the investment industry sector?

A: Here we are supposed to elaborate the degree to which the rivalry among the competitors affects the…

Q: Why are financial intermediares so important to an economy?

A: Definition : In simple words, financial intermediaries refers to the individuals and entities that,…

Q: Why is it that the goal of financial management is maximization of shareholders’ wealth rather than…

A: Financial management is defined as the planning, organizing, directing, and also the controlling of…

Q: How do profit potential and legal considerations affect a firm’scredit policy?

A: It refers to the policy which states interest rate and duration that are relevant to the funds…

Q: What are financial intermediaries, and what economic functions do theyperform?

A: Financial intermediaries connect the borrowers and lenders in the financial market. The financial…

Q: Why does business risk vary from industry to industry?

A: Business risk It is the probability of occurrence of an inadequate amount of loss because of…

Q: What allows financial institutions to generate a profit? What are the conditions under which their…

A: THE INTRODUCTION: The marketplaces where financial assets and instruments are traded and the sites…

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: How does operating leverage affect business risk?

A: If an organization has high fixed expenses or cost, and if an organization experiences issues…

Q: What's the connection between financial intermediaries and securitization? When securitization moves…

A: This question explains about the connection between financial intermediaries and securitization

Q: How behavorial bias affect investment behavior?

A: Behavioral bias is the belief by the investors that unknowingly affects the investors investment…

Q: What are the possible actions that a firm can take if it experiences a financial failure?

A: Financial failure of the firm could be resulted because of overspending, higher degree of illiquid…

Q: What is the market economy?How dothe financial marketsinteractwith product and labor markets to…

A: The Market economy is an economy model in which all the decision regarding the demand and supply of…

Q: What do you mean by non quantifable factors ? (Corporate Finance)

A: Quantifiable factors in corporate finance refer to the financial numbers that defines the company’s…

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: What do you meant by not for profit objective of the firm?

A: The sole purpose of any business organization is to earn profit. However, there are some…

Q: Explain how a company can be “profit rich, yet cash poor.”

A: Corporation: A corporation is a form of business entity that is incorporated through the state…

Q: What is the significance of Financial Management? What are the advantages and disadvantages of…

A: Financial management: It is the process of organizing, collecting, managing, and distributing funds…

Q: Does it ever make sense for a profitable company with positive cash flow to seek external financing?…

A: External financing is any kind of business funding you acquire from sources outside the company.…

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: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: Explain how differential weight to losses and gains effect investment decisions?

A: Prospect Theory assigns differential weight to losses and gains for making investment decisions.

Q: What could possibly go wrong while using financial leverage? Do you think it should be utilized by a…

A: Financial leverage: Financial leverage is a word that describes the use of borrowed money (debt) to…

Q: Should companies preserve their financial flexibility in times of financial crises?

A: Definitions : Financial flexibility : In simple words, financial flexibility can be defined as the…

Q: What can you say about the market value of the company? is it positve or is negative?

A: In finance market value of a company is the worth of the company and the worth of the company 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: financial factors that the firm should consider in the decision making process?

A: Quality is a very important aspect in the process of manufacture as brand and goodwill is created by…

Q: What are the main implications of financial risk associated with the company?

A: There are various types for financial risk which are associated with the company such as: 1) Market…

Q: What does the term “value of an unlevered firm” mean?

A: A firm is an organization that sells or produces something or that offers a service.

Q: t are the main hindrances in valuation estimates in business valuation?

A: Knowing how much an asset is worth and what factors influence its value is essential for making…