Which of the Following Ratios Would Be Considerably Higher for a Financial

question 75

Multiple Choice

Which of the following ratios would be considerably higher for a financial services company as opposed to a manufacturer?

• A)EPS
• B)Debt-to-equity
• C)Net profit margin
• D)Price earnings

Distinguish between different legal doctrines and rules (e.g., Ultramares rule, Restatement (Second) of Torts) that affect accountant liability.

Recognize the role of privity of contract and the impact of third-party users on accountant's liability.

Understand the implications of securities laws (e.g., Securities Act of 1933, Securities Exchange Act of 1934) on accountants' responsibilities and liabilities.

Recognize the penalties and defenses applicable to accountants under common law and federal securities laws.

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Definitions:

Financial Manager

A professional responsible for managing the financial health of an organization by developing strategies and plans for the long-term financial goals of their organization.

Accounting System

A structured process of collecting, recording, summarizing, and reporting financial transactions to oversee a company's financial health.

Operating Budgets

Detailed projections of income and expenses associated with the daily operations of a company over a specific period.

Financial Control

The management of a company's expenses, income, and assets in order to increase profitability and ensure stability and compliance with financial regulations.