Nguyen Khanh Son-Chapter 3,4,5-Finance

Nguyen Khanh Son-Chapter 3,4,5-Finance - Name:Nguyen Khanh...

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Name:Nguyen Khanh Son Batch 2, Troy university Chapter 3 Questions: 3-2 There are 2 basic users who use financial statements are chairperson and stockholders. The chairperson will describes the firm’s operating results during the past year and discusses new development that will affect future operations. Stockholders will use information in 4 basic financial statements to help themselves forecast future and dividends when they invest in stock market. 3-4 The balance sheet can be thought of as a snapshot of a firm’s financial position at a point in time because it reported in the end of the year and show the assets that the company owns, liabilities and stockholders’ equity Income statements are prepared monthly, quarterly and annually. The quarterly and annual statements are reported to investors, while the monthly statements are used internally for planning and control purposes. 3-6 Free cash flow is the amount of cash that could be withdrawn from a firm without harming its ability to operate and to produce future cash flows. We are interested in free cash flow than income statement because it shows the amount of cash that could be withdrawn without harming a firm’s ability to operate and to produce future cash flows. 3-9 Double taxation is the imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes). It refers to two distinct situations: Taxation of dividend income without relief or credit for taxes paid by the company paying the dividend on the income from which the dividend is paid. This arises in the so-called "classical" system of corporate taxation, used in the United States. Taxation by two or more countries of the same income, asset or transaction, for
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Nguyen Khanh Son-Chapter 3,4,5-Finance - Name:Nguyen Khanh...

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