Describe Some Ratios That Can Be Calculated Using the Basic

question 46

Essay

Describe some ratios that can be calculated using the basic financial statements that will help a decision maker assess the financial position of the government.

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Definitions:

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.

Retained Earnings

The portion of a company's profits kept in the business after dividends are paid, used for investment or debt repayment.

Financing Activities

Activities reported in the statement of cash flows that illustrate changes in the size and composition of the equity and borrowings of a company.

Bonds Issued

Long-term debt securities issued by corporations or governments to raise funds, promising to pay back with interest.