(1)
Financial statement
A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:
- Balance Sheet
- Income statement
- Statement of owners’ equity
- Statement of cash flows
Financial leverage
Financial leverage refers to balancing the debt with equity component of the total capital structure of the company. The efficient management of the company would like to create favorable financial leverage by earning a surplus return on its borrowed funds over the cost of the borrowing.
To Calculate: The debt - equity ratio for the year 2018, if the average ratio is 1 as per New York stock exchange, what information does your calculation provide an investor.
(2)
To Identify: The AGF experiencing favorable or unfavorable financial leverage.
(3)
To Calculate: The times interest earned ratio, the coverage for the stock listed on the New York Stock Exchange in a comparable time period was 5.1, and indicates about the AGF risk.
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INTERMEDIATE ACCOUNTING RMU 9TH EDITION
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