Assignment 9 Essay

745 Words Jul 30th, 2013 3 Pages
Assignment 9: Business Finance
(16.0 points)

1. Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose to open a hair salon, a babysitting service, a record store, or many other things. This can be the same type of company you chose in assignment 8, or it can be different.

a. Describe the type of company you chose. (1-2 sentences. 0.5 points) The type of company I choose would be an exotic pet shop.

b. If you needed to get funding for your company, would you prefer to get debt funding or equity funding? Explain why you would prefer this type. (2-4 sentences. 2.0 points) Personally, I would prefer to choose debt funding. That way I
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The least funding department would be Information technology department because we wouldn’t really need a fancy network database. I think the start stage would be the most expensive.

2. Review the Financial Statements: Income Statement from Section 9, Lesson 2 of this course. Use the information from the example income statement for Jamie's Bead Jewelry to answer the questions below.

a. What are the two sources of revenue for the company? (0.5 points)

b. What is the company's total revenue? (0.5 points)

c. What is the company's net profit? (0.5 points)

d. Is the company experiencing a profit, or a loss? (0.5 points)

3. Review the Financial Statements: Balance Sheet from Section 9, Lesson 2 of this course. Use the information from the example balance sheet for Jamie's Bead Jewelry to answer the questions below.

a. What is the value of the company's assets? (0.5 points)

b. What is the total of the company's liabilities? (0.5 points)

c. What is the total owner equity? (0.5 points)

4. Calculate the following financial ratios. TIP: If you don't remember how to calculate financial ratios, review the Calculating Financial Ratio pages from Section 9, Lesson 2 of this course.

a. A company makes a net profit before tax of $12,000 and has $20,000 in total equity. Calculate the company's return on equity as a…

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