Deca

Question 1

Profitability analysis

Answer 1

Profitability analyses assess whether a company makes enough revenue to cover its costs and make a profit. The Gross profit margin measure the percentage of revenue that exceeds the cost of goods sold. To get it a subtract the cost of the goods sold from total revenue, divide by the total revue and multiply the quotient by 100. The net profit margin measures the percentage of revenue remaining after all liabilities. To get it divided net income by revenue and multiply the quotient by 100.

Question 2

Liquidity analysis

Answer 2

Liquidity analysis helps determine a company’s ability to meet short term financial obligations. The current ratio divides assets by liabilities to find how easily a company can Cover liabilities with its assets. The quick ratio is the same but it subtracts inventory from assets to find whether the company has to rely on its inventory when pay off debt.

Question 3

What does the compliance department in an investment bank do

Answer 3

Investment banks must comply with any regulations regarding communications and monitor communications for potential violations. The compliance department makes sure the bank is following these regulations. An employee of the compliance department would monitor communications between employees and the public.

Question 4

Corporations

Answer 4

A corporation is separate from its owners. It offers limited liability because it protects the personal assets of its owners from company debts, so the owners are only liable up to the amount of their investment. S corporations are a type that also give profits to shareholders directly, avoiding double taxation.

Question 5

Partnerships

Answer 5

They Offer lower tax rates but not limited liability.

Question 6

Open and close corporations

Answer 6

They off limited liability but not lower tax rates.

Question 7

Import and export law

Answer 7

You don’t need a license to import supplies.
Imports must have a label stating what country they came from
Government officials are required to examine incoming shipments for prohibited materials, but they cannot take part of it.

Question 8

IRA

Answer 8

Money in an IRA is not taxed until you withdraw it

Question 9

Dividends

Answer 9

Dividend are subject to dual taxation. The company and the shareholder pay tax on dividends.