Although There Are Many Different Cultural and Legal Approaches Used

question 66

Essay

Although there are many different cultural and legal approaches used in corporate governance worldwide, there is a growing consensus on what constitutes good corporate governance. List and explain at least three standardized common principles of good corporate governance.

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Definitions:

Balance Sheet

An accounting report that outlines a firm's assets, obligations, and owners' equity on a specific date.

Leverage Ratio

A financial metric indicating the level of debt relative to equity in a company's capital structure, used to assess the risk of investing in the company.

Acid-test Ratio

A financial metric used to evaluate a company's short-term liquidity, calculated by dividing liquid assets by current liabilities.

Financing Activities

Financial transactions that involve raising capital and repaying investors, such as issuing equity, securing loans, or paying dividends, which impact a company's cash flow.