Principal of Finance I Week 3, Ratio analysis , accounting homework help

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There are two discussion questions that need to be answered below , please answer both discussion questions thanks so much in advance !!!!

Discussion 1

The more debt a firm uses, the greater its financial leverage, which magnifies both risk and return. Discuss the relationship between debt and financial leverage and the ratios used to analyze a firm’s debt. In your response, choose a public-traded company and review their latest annual report. Provide a summary of the comments that are made regarding the company’s debt and financial leverage. Your responses should include at least two peer-reviewed sources for support of your findings.

Discussion 2

Ratio analysis enables stockholders, lenders, and the firm’s managers to evaluate the firm’s financial performance. For this discussion, choose one of these stakeholders and discuss examples of how they use ratios to make decisions regarding the organization.



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Explanation & Answer

All done!

(1)
To analyze financial leverage through strategic debt, I chose to look at the company Apple’s 10K report from 2016. In the financial data section, they have listed all assets, debts, liabilities, and
income statements from the 2016 fiscal year. In total for 2016 Apple has approximately $114B in
debt (www.apple.com). Of course, this sounds like a large amount, and many people may feel
like this is absurd for a company like Apple, one of the richest companies in the world, to need to
be borrowing this much money. This just goes to show that regardless of financial stat...


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