Consider, for example, the firm's dividend policy. In theory, it should not matter to the investors what the firm's dividend policy is. The company can either distribute the profits as dividends or reinvest them into the company as retained earnings. Either way, the shareholders' value increases. But in practice, it does matter, because retained earnings don't necessarily translate into increased stock price. An assessment of a firm's financial health should probably include its dividend policy.
Think of other additional topics you would include in your assessment. Some of them are: depreciation, securitization, leasing, etc. Why do you think those topics are important? Explain your reasoning.
Consider, for example, the firm's dividend policy. In theory, it should not matter to the investors what the firm's dividend policy is. The company can either distribute the profits as dividends or reinvest them into the company as retained earnings. Either way, the shareholders' value increases. But in practice, it does matter, because retained earnings don't necessarily translate into increased stock price. An assessment of a firm's financial health should probably include its dividend policy.
Think of other additional topics you would include in your assessment. Some of them are: depreciation, securitization, leasing, etc. Why do you think those topics are important? Explain your reasoning.
For unlimited access to Homework Help, a Homework+ subscription is required.