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Reporting & Analyzing Liabilities; Stockholders Equity

C 10 - Reporting & Analyzing Liabilities
 
1. Does your company use short-term or long-term financing to acquire a majority of funds it needs? Please explain without going into too much detail about your company.

2. What are the advantages of using long-term debt versus short-term debt? Discuss the impact base on their availability, risk, cost etc.

C 11 - Reporting & Analyzing Stockholders' Equity
 
3. As an individual investor do you think bond or stock is a better investment for you? Explain.

4. Should a company hold on to profit (net income) and not return them back to stockholders in the form of dividends? Discuss why and why not.

5. Discuss the benefits or disadvantage of selling stocks as related to the issuer (the company).

6. Discuss the benefits or disadvantage of buying stocks as related to the buyer.

C 10 - Reporting & Analyzing Liabilities

7. What is a current liability? What is a noncurrent liability? What is the difference between the two types of liabilities? In which financial statement would you find these liabilities?
 
8. What are the types of equity accounts? What is the role of equity accounts in raising capital? Under what circumstances would you not pay a dividend? Under what circumstances would up pay a dividend?

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10 - Reporting & Analyzing Liabilities

1. Does your company use short-term or long-term financing to acquire a majority of funds it needs? Please explain without going into too much detail about your company.

Our company is engaged in construction business as it builds residential buildings and factories. Since the company needs heavy investment for undertaking the project and also duration is quiet high for the completion of the contract, the company's funds are mostly financed by long term funds instead of short term funds.

2. What are the advantages of using long-term debt versus short-term debt? Discuss the impact base on their availability, risk, cost etc.

Advantages of using long term debt:

The main advantage of long term debt is that the funds are available with the company for quiet long period of time and there is no risk of refunding the funds in the immediate future. Further, it is better to repay the lower amount each month as an installment. However, the main risk involved is that the company has to pay high amount of interest expense for quiet long period of time. Further, short term debt is more easily available compared to long term debt as the amount involved is high in the case of long term debt. There is risk of being the providers of long term debt interfering in the affairs of the company.

C 11 - Reporting & Analyzing Stockholders' Equity

3. As an individual investor do you think bond or stock is a better investment for you? Explain.

As ...

Solution Summary

The solution assists in reporting and analyzing liabilities and stockholders equity.

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