408 hw1

408 hw1 - BUSI408 TR 12:30 Isabella (Haoyang) Huang PID:...

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BUSI408 TR 12:30 Isabella (Haoyang) Huang PID: 715099441 Questions: 1. The time trend analysis is useful because it tells you where you are going and how fast you are getting there. It helps you to forecast the business in the future and helps you to make decisions now. Peer group analysis involves comparing the financial ratios and operating performance of a particular firm to a set of similar firms. Comparing a firm to its peers allows the financial manager to evaluate whether some aspects of the firm’s operations, finances, or investment activities are out of line with the others, thereby providing some guidance on taking actions to make adjustment to these ratios if appropriate. 2. If a company is growing by opening new stores, then total revenues would be rising. Comparing total sales at two different points in time might be misleading. Same-store sales control for this by only looking at revenues of stores open within a specific period. 6. Because it is impossible to compare companies in different sizes. For example, it’s hard to compare GM, Ford and Toyota. Although they are rivals, they are all in different sizes and
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This note was uploaded on 02/27/2012 for the course BUSI 407 taught by Professor Bowen during the Spring '11 term at UNC.

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408 hw1 - BUSI408 TR 12:30 Isabella (Haoyang) Huang PID:...

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