#1 We know that financial statements are composed of numerical data compiled so that the overall financial health of a business can be determined. When we look closer at the data, different types of analysis can be performed to give a reviewer a more specific indication of how well a business is performing. The tools that are used are vertical and horizontal analysis, and financial ratios.
What types of financial ratios are used to analyze financial performance? Are some more important than others? Why? Which ratios are important to creditors, investors, and managers? Why? 150-200 words
#2 In Chapter Two the intangible asset Goodwill is presented. Goodwill is something that you can’t touch or hold, but is of value to a company. Goodwill can only be generated when one company purchases another company at greater than the fair market value. Goodwill can stand for many things, one of which might be the reputation that a longstanding company has earned so when that company sells at greater than fair market value, the buyer is now the recipient of the reputation that the seller had earned through years of service. I found an informative video I’d like to share relative to the asset account Goodwill. Please view it at: https://www.youtube.com/watch?v=SoZpDwoyEJ8
You will be able to see print of the audio by clicking the closed caption icon on the right hand side of the bottom bar underneath the video screen.
Class: What other examples of Goodwill can you provide, and what may you have seen that was actual Goodwill that you can share with us? I look forward to your discussion. 150-200 words