Financial measures of profitability, liquidity, efficiency, and leverage.

 

1) Identify and describe one of the financial measures of profitability, liquidity, efficiency, and leverage.

2) How can an analyst use one of these financial measures to evaluate the financial condition of a corporation?

Sample Solution

Financial measures of profitability, liquidity, efficiency, and leverage

Financial analysis refers to an activity of assessing financial statements to judge the financial performance of a company. It helps in assessing profitability, solvency, liquidity and stability. Financial statement analysis has three broad tools: Ratio Analysis, DuPont Analysis, and Common Size Financials. Ratio Analysis refers to the analysis of various pieces of financial information in the financial statements of a business. They are mainly used by external analysts to determine various aspects of a business, such as its profitability and liquidity. Analysts can use ratio analysis to compare a company’s financial performances to similar firms in the industry to understand the company’s position in the market. Obtaining financial ratios, such as Price/Earnings, from known competitors and comparing it to the company’s ratios can help management identify gaps and examine its competitive advantages, strengths, and weaknesses. The management can then use the information to formulate decisions that aim to improve the company’s position in the market.

imports of cotton-type bed-linen from India by publishing a notice of initiation. Provisional anti-dumping duties were imposed by EC Council. This was followed by the imposition of definitive duties. India contended that the determination of standing, the initiation, the determination of dumping and injury as well as the explanations of the EC authorities’ findings are inconsistent with the WTO law and such other contentions.

The Dispute Settlement Body established a panel and concluded that the EC did not act inconsistently with some of its obligations under the anti-dumping agreement. The role of the Dispute Settlement Body in this case was crucial in establishing that the WTO could uphold the rights of poorer nations in the context of trade defense. In this case, the Dispute Settlement Body considered the legal interpretation of certain key principles under the anti-dumping agreement, including the calculation of the “constructed value” based on data from “other producers or exporters”, and the consideration of sales at a loss when calculating administrative, selling and general costs under the anti-dumping agreement. It is said that the most significant contribution of the proceeding concerned the prohibition of zeroing, more specifically ruling illegal the pernicious practice of resetting negative dumping margins as zeroes under the anti-dumping agreement.

d) India – Agricultural Products case
The United States requested consultations with India with respect to the prohibitions imposed by India on the importation of various agricultural products from the United States purportedly because of concerns related to Avian Influenza. The United States claims that the measures appear to be inconsistent with the Sanitary and Phytosanitary measures (SPS) and also Articles I and X

This question has been answered.

Get Answer
WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, Welcome to Compliant Papers.