Economics

Answer the following questions and submit to Chapters 14 Questions.

1. Explain and give two examples of how the controlling management function can be accomplished using the data found on the balance sheet and the P&L statement.

2. How do you know if a ratio’s value is good or bad? Is it possible for a ratio to be too high in once case and too low in another? Explain your answer with an example using one of the ratios found in this chapter.

3. Define the four general types of ratios – liquidity, solvency, activity, and profitability. What does each type tell a manager about the financial performance of his or her business?

4. Why is it necessary to understand the purposes of the balance sheet, P&L statement, and financial ratios before you can understand the value of cash flow budgets?

5. What doe the term pro forma mean?

6. How does a cash flow budget strengthen the financial foundations of an agribusiness?Using Chapter 14 Financial Documents answer the following questions:

7. What is the current ratio of this business

8. What can you determine about the liquidity of this business?

9. What can you determine about the solvency of this business?

10. What is the ROIC of this company?