Final Exam Essay Questions and Answers

Final Exam Essay Questions and Answers - A) Describe the...

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A) Describe the three key economic indicators in the United States? What do they measure? Economic indicators are used for the statistics and it helps to calculate the performance of the economy and gives an overview of what problems a particular economy is facing. The three economic indicators in the United States are unemployment rate, Gross domestic product and the inflation rate. Unemployment rate measures the number of people unemployed expressed as a percentage of the labor force. The workforce includes all those who are economically active. Gross Domestic product (GDP) measures the total output produced in a country. Inflation rate helps to check out the increase in prices of commodities in a particular year. It shows that how much the average prices of a particular good has increased. B) Explain the purpose of financial statement analysis. Provide an explanation of each one of the four types of ratios and what it represents (why is it calculated and how is it used for financial analysis) The purpose of the financial statement analysis is to evaluate and examine the current and the past financial data such as balance sheet and the profit and loss account so that an organization’s future risks can be estimated and the financial position as well as the overall performance can be evaluated. Ratios are the additional tools which help to check out the performance of the business. The four types of ratios are, 1) Profitability ratios: These are used to assess how successful management of a business has been at earning profits for the business from sales and from the assets
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employed. Gross profit margin, net profit margin and return on capital employed are
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Final Exam Essay Questions and Answers - A) Describe the...

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