CHAPTER 2 REVIEWING FINANCIAL STATEMENTS
1. List and describe the four major financial statements.
The four basic financial statements are:
1. The balance sheet reports a firms assets, liabilities, and equity at a particular point in time.
2. The income s
Chapter 6 Homework
1. Classify the following transactions as taking place in the primary or
a. IBM issues $200 million of new common stock primary market
b. The New Company issues $50 million of common stock in an IPO
Principles of Finance
Managers, investors and analysts universally use ratios
to evaluate financial statements.
Ratio Analysis involves calculating and analyzing
financial ratios to assess a firms performance and to
identify actions that could
Chapter 6 Notes
Primary Markets versus Secondary Markets
Primary Markets Markets in which corporations raise funds through new
issues of securities.
Used by corporations and governments
Used to issue new financial instruments (eg; Stocks and
Chapter 18 Notes
Firms finance assets with Capital
Private Capital Suppliers categories:
Suppliers of Debt Financing (capital funds borrowed from)
Borrowing from friends and relatives