Which TWO of the following are possible effects of rising prices upon financial statements? Understatement of capital employed Overstatement of capital employed Overstatement of profits Understatement of profits

Q: Differentiate between book value and market value. Explain why GAAPallows smoothing earnings…

A: The net value of a company's assets, as represented on its balance sheet, is roughly equal to the…

Q: Which of the following financial ratios is not a measure of operating profitablitlity? Return on…

A: Formula: Return on Assets = Net income / Total Assets.

Q: r to pay un

A: Horizontal analysis :  Financial analysts use horizontal analysis, also known as trend analysis or…

Q: Why do changes in retained earnings occur?

A: Introduction: Retained earnings are nothing but the accumulated profits that the corporation keeps…

Q: a) What is the purpose of internal earnings targets? (b) What is the risk associated with internal…

A: ‘’Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: True or False Returns from the overall market can be thought of as a combination of three factors:…

A: The operating profit of a corporation is the entire earnings from its core business tasks for a…

Q: The gain or loss on the net monetary position in a hyperinflationary economy shall be included in:…

A: This question is answered according to IAS 29 "Financial Reporting in Hyperinflationary Economies"

Q: Discuss some financial variables that affect the price-earnings ratio?

A: The price-Earning Ratio refers to the ratio between earning per share and the current market price…

Q: what reduces both basic earnings and dilluted earnings per share?

A: There are several factors that can reduce both basic earnings per share (EPS) and diluted EPS:…

Q: How does accounting rate of return (ARR) differ from the internal rate ofreturn (IRR)?

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: Why is "Projecting Growth Beyond What the Capital Being Valued Will Support" considered a common…

A: Income Approach There are two different model which was incurred in the income approach.  The…

Q: Alucard Company has two divisions, AAA and BBB. Both qualify as business components. In 2023, the…

A: Firm decided to dispose of the assets and liabilities of division BBB which will be considered as…

Q: What is Pro forma (or projected) profit-and-loss statement?

A: Pro Forma financial  Statement (also called as pro forma profit and loss) means that however the…

Q: Which of the following is not a factor in producing earnings forecasts?

A: Factors that are typically considered when producing earnings forecasts include the separation of…

Q: Why does Non-GAAP earnings are controversial?

A: Definition: Generally Accepted Accounting Principles (GAAP): These are the guidelines necessary to…

Q: 2. How do non-GAAP earnings relate to the concept of earnings quality?

A:

Q: Comment on the following statements with suitable example: i. The ratio return on assets has net…

A: Ratio analysis is a tool used by the financial analyst to measure the financial performance of the…

Q: Why does an increase in the ratio of current assets to total assets decrease both profits and risk…

A: Current assets and current liabilities are utilized to decide the liquidity of an organization. At…

Q: Ratios:  Which of the following ratios is not considered to be a test of profitability?   Long-Term…

A: Profitability ratios are a group of financial indicators that are used to evaluate a company's…

Q: What does the price-earnings ratio measure?

A: Formula Price earning ratio = Market Price per shareEarnings per share

Q: Explain the difference between NOPAT and net income. Which is a better measure of the performance of…

A: The net operating profits after taxes (NOPAT) is the operating profits after taxes. It includes all…

Q: How can earnings management affect the quality of ­earnings?

A: The concept of quality earning shows the amount of earning which is not earned by any default or…

Q: Is the accounting rate of return (ARR) the same thing as the return on investment (ROI)?

A: Yes, Accounting rate of return (ARR) the same thing as the Return on investment (ROI). The…

Q: When making judgements lower profits and asset values are estimated rather than higher values. Which…

A: The underlying principles, assumptions, and circumstances that establish the parameters and…

Q: What are the impotance of Earning per Share and Diluted Earnings per Share in making economic…

A: Diluted EPS= Net Income−Preferred DividendsWASO+CDS​ where: EPS=Earnings per share WASO=Weighted…

Q: What are the characteristics of a strong income statement?

A: