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Financial management

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https://www.studypool.com/questions/209630/i-have-finance-class-and-i-need-some-one-to-
answer-some-questions?item=10
https://www.studypool.com/discuss/1006173/finance-home-work-fin-343 ( this the real question
with par t 1 and 2
Financial management:
Answers
Chapter one
1. A LLC also known as a limited liability company is a form of legal structure that
provides a limited liability to the members just like in a corporation. The profits and
losses of the business are passed directly to the members of the LLC. The LLC does not
pay taxes but they are deducted from the individual members through their taxable
income. The goal of an LLC is to provide liability similar to that of a corporation, and at
the same time, provide operational flexibility and efficiencies in taxations similar to those
of a sole proprietorship.
2. The SarBox, is a common name of the Sarbanes- Oxley Act of 2002, is a legislation that
was passed by the Congress that is meant to protect the stakeholders from accounting
errors or fraud and from financial malpractices. One of the requirements of Sarbox is that
all the financial reports of corporation to include an internal controls report. Going dark
means to become private. The unintended ironic consequence of Sarbox, is that some of
the corporations involved in accounting fraud and financial faults chose to close the
businesses in the U.S but continued to operate in other countries without correcting their
financial faults.

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3. An agency problem is a conflict of interest that exists between the principal such as
stakeholders and the agents such as managers. Agency problem can also be between
stakeholders and creditors or between managers and creditors. Such conflict may occur
during take over in a situation where the manager does not support takeover because of
concerns on his job security while the stakeholders want the take over for financial gains
or business growth. Not all businesses have agency problem because not all some
businesses have agents that manage them in such a way that the interests of both parties
are met and thus, agency problem is avoided.
4. A stakeholder is someone or an organization or even a group that lays claim to a business
or corporation and who are directly affected by the decisions made by the organization.
Stakeholders include investors (shareholders), employees, company, creditors among
others.
5. Cash flow is important in any business. It shows the cash that was received into the
business and the amount of cash that was paid out from the business within a specific
period of time. Cash flow shows the operating capital, investments and financing of the
business. It is also used to show the taxes and interests paid as well as to show other non-
cash activities relating to investing and financing.
6. In primary market, the new securities on exchange are issued and the investors can
participate firsthand in the issuance of new securities, while secondary market issue
securities or assets from other investors and not from the issuing company itself. The
investors in secondary markets purchase the securities or assets from other investors.
Chapter Two

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https://www.studypool.com/questions/209630/i-have-finance-class-and-i-need-some-one-to-answer-some-questions?item=10 https://www.studypool.com/discuss/1006173/finance-home-work-fin-343 ( this the real question with par t 1 and 2 Financial management:  Answers Chapter one 1. A LLC also known as a limited liability company is a form of legal structure that provides a limited liability to the members just like in a corporation. The profits and losses of the business are passed directly to the members of the LLC. The LLC does not pay taxes but they are deducted from the individual members through their taxable income. The goal of an LLC is to provide liability similar to that of a corporation, and at the same time, provide operational flexibility and efficiencies in taxations similar to those of a sole proprietorship. 2. The SarBox, is a common name of the Sarbanes- Oxley Act of 2002, is a legislation that was passed by the Congress that is meant to protect the stakeholders from accounting errors or fraud and from financial malpractices. One of the requirements of Sarbox is that all the financial reports of corporation to include an internal controls report. Going dark means to become private. The unintended ironic consequence of Sarbox, is that some of the corporations involved in accounting fraud and financial faults chose to close the businesses in the U.S but continued to operate in other countries without correcting their financial faults. 3. An agency problem is a co ...
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