Posted: April 20th, 2022

You and your friend want to invest in shares of a public company.

You and your friend want to invest in shares of a public firm. Your friend, who took an accounting course years in the past however dropped out, provided to take a look at the monetary statements of one firm and e-mailed you the next about their findings: a. “The steadiness in amassed depreciation could be very massive.
Transcribed picture textual content:

You and your friend want to invest in shares of a public firm. Your friend, who took an accounting course years in the past however dropped out, provided to take a look at the monetary statements of one firm and e-mailed you the next about their findings: a. “The steadiness in amassed depreciation could be very massive. I’m not certain, however I believe that amassed depreciation is a financial savings account for future purchases of property and tools. If I’m right and the corporate spends all the pieces recorded in amassed depreciation, they will not have any money left.” . Is your friend right in their understanding? (2 marks – 5 minutes) No It is incorrect. Accrued depreciation is an outdated property or tools worth in future the corporate will bought the property tools, money. 1 1 X get So and or b. “I seemed on-line for the corporate’s ratios and discovered that its revenue margin for 2021 was eight.5% however solely 6.zero% in 2020. That signifies that the 2021 outcomes had been higher as gross sales income should rising, right?” Has your friend interpreted the revenue margin ratio appropriately? (revenue margin = internet revenue / gross sales income) (2 marks – 5 minutes)

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You and a friend want to purchase inventory in a public firm. Your friend, who took an accounting course however dropped out years in the past, provided to look over one firm’s monetary statements and e-mailed you the next details about their findings: a. “The amassed depreciation steadiness could be very massive.”
Picture textual content transcription:

You and a friend want to purchase inventory in a public firm. Your friend, who took an accounting course however dropped out years in the past, provided to look over one firm’s monetary statements and e-mailed you the next details about their findings: a. “The amassed depreciation steadiness could be very massive.” I am unsure, however I imagine amassed depreciation serves as a financial savings account for future purchases of

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