What form of partnership allows some of the
investors to limit their liability?
BU340 Managerial Finance I
Directions: Be sure to make an electronic
copy of your answer before submitting it to Ashworth College
for grading. Unless otherwise stated, answer in complete
sentences, and be sure to use correct English spelling and
grammar. Sources must be cited in APA format. Your
response should be a minimum of one (1) single-spaced page to
a maximum of two (2) pages in length; refer to the “Assignment
Format” page for specific format requirements.
1. What form of partnership allows some of the
investors to limit their liability? Explain by giving
examples. (25 points)
2. When does insider trading occur? What
government agency is responsible for protecting against the
unethical practice of insider trading? Explain by giving
examples. (25 points)
3. Explain how the tax code allows depreciation to
contribute to cash flow. (25 points)
4. Explain why inflation may restrict the usefulness
of the balance sheet as normally presented. (25 points)(Related to Regardless of Your Major: Welcome to the World
of Finance on page 4) In the
Regardless of Your Major feature box at the beginning of this
chapter, we discussed how
the topic of Principle 1, the time value of money, is relevant
to both your personal and
professional life. Describe a decision you might face in the
future that will require you
to consider the future value of money received (or invested).
For example, how might
the time value of money enter into a decision to push back your
graduation date by one
1–2. Explain the three types of business decisions that a
financial manager faces.
1–6. Who really owns a corporation and how does that impact the
goal of the firm?
4–27. (Financial statement analysis) The last two years of
financial statements for Carver
Industries are found below:
Financial Management: Principles and Applications, Eleventh
Edition, by Sheridan Titman, John D. Martin, and Arthur J. Keown.
published by Prentice Hall.
Copyright © 2011 by Pearson Education, Inc.
CHAPTER 4 | Financial Analysis 119
Current ratio 5.00
Acid-test (quick) ratio 3.00
Inventory turnover 2.20
Average collection period 90.00 days
Debt ratio 0.33
Times interest earned 7.00
Total asset turnover 0.75
Fixed asset turnover 1.00
Operating profit margin 20%
Return on equity 9%
Industry Averages 2009 2010
Current ratio 2.00
Acid-test ratio 0.80
Average collection period 37.00