Sophia Principles of Finance Unit 1 Milestone 1

Consider the P/E ratios of the following companies: Company A: 5.34 Company B: 3.33 10/13/2020 Sophia :: Welcome Company C: 7.90 Company D: 6.75 Which company has the lowest relative value among investors? Company B Company A Company C Company D CONCEPT Market Value Ratios 5 The purpose of a pro forma balance sheet is to __________. analyze the effects of a sales forecast analyze historical data compare previous accounting periods prepare for a financial audit CONCEPT Forecasting the Balance Sheet 6 If a balance sheet shows $4 million in current assets, $7 million in long-term assets, $2 million in current liabilities and $6 million in long-term liabilities, what is the company's net working capital? 10/13/2020 Sophia :: Welcome $4 million $3 million $1 million $2 million CONCEPT The Balance Sheet 7 Finance is most concerned with __________. determining the current value of assets and investments determing the ratio of assets to investments determining how much assets and investments will be worth over time determining how much assets and investments were worth in the past CONCEPT Introducing Finance 8 Why are ethical issues complicated for businesses that operate in the global economy? Because they tend to have more employees. Because different cultures have different norms and values. 10/13/2020 Sophia :: Welcome