5 Companies

Question 1

income statement

Answer 1

results over period of time

inc depreciation & amortization

Question 2

balance stmt

Answer 2

snapshot of fin strength at a particular point in time

Question 3

Earnings Per Share (EPS)

5,000 in earings

1,000 share =

Answer 3

$5 EPS

Question 4

Price to Earnings Ratio (P/E)

Answer 4

market price to EPS

Question 5

Dividend Payout Ratio

Answer 5

Annual DIV / EPS

Question 6

Capital Asset Pricing Model (CAPM)

Answer 6

riskless rate of return

Question 7

Sharpe Ratio

Answer 7

returns for risk

Question 8

Sole Proprietor

1. Advantages
2. Disadvantages
3. Tax
4. Libality
5. Notes

Answer 8

1. Easy set up
2. Personal libality, hard to get loans
3. Personal income , 1040
4. Yes

Question 9

General Partnership (GP)

1. Advantages
2. Disadvantages
3. Tax
4. Libality
5. Notes

Answer 9

1. flow-through income & expenses
2. Personal libality
3. flow-through to owners
4. personal

Question 10

Limited Partnership

1. Advantages
2. Disadvantages
3. Tax
4. Libality
5. Notes

Answer 10

1. flow-through income, expenses
2. GP has unlimited liability
3. Flow-through owners
4. none

Question 11

LLC

1. Advantages
2. Disadvantages
3. Tax
4. Libality
5. Notes

Answer 11

1. flow-through income & expneses, flex profit distributions
2. does not attract Venture capital
3. flow through to owners
4. no
5. must avoid 2 of the following or will be corp
   
   1. perpetual life
   2. central mgmt
   3. freely transferable assets
   4. limited liablity

Question 12

S-Corp

1. Advantages
2. Disadvantages
3. Tax
4. Libality
5. Notes

Answer 12

1. flow through income, expenses, write off
2. annual mtgs, no Venture Captial, 1 class stock
3. flow through to owners
4. no
5. limited to 100 share holders, must be US, married couple =1

Question 13

C-Corp

1. Advantages
2. Disadvantages
3. Tax
4. Libality
5. Notes

Answer 13

1. attracting capital
2. double taxation of income, annual mtgs
3. taxed as bus
4. no