Explain the following, stating clearly their significance to the organisation, shareholders, and implications for investors.  

1. Gross Profit Margin

2. Net Profit Margin

What advantages do sole proprietorships and partnerships offer?What is a major drawback of these types of organization? (10points)

In a corporate governance, what group has the ultimateresponsibility for monitoring management and protecting thestockholders' interests? Who elects this group? (10 points)

What is meant by maximizing owner’s equity value (shareholderwealth)? Why are maximizing just net income, or just profit,inappropriate goals? (10 points)

List and describe the four major financial statements. (20points)

Why do financial managers and investors find cash flows to bemore important than accounting profit? (10 points)

What information does time series analysis provide for firmmanagers, analysts, and investors? (10 points)

Define the following ratios and explain their significance. (30points)

Quick ratio,Average collection period ,Return on equity,Debtratio, Profit margin

Suppose that an analyst has noticed that the return on equity of the XYZ Company has declined from 2012 to 2013. (millions) 2013 2012 Sales $1,000 $900 Earnings before interest and taxes $400 $380 Interest expense $30 $30 Taxes $100 $90 Total assets $2,000 $2,000 Shareholders’ equity $1,250 $1,000 a. Fill in the following table (please show detailed calculations for each ratio, including the formula used, below that table): 2013 2012 Return on equity Return on assets Financial leverage ratio Total asset turnover Net profit margin Operating profit margin b. Using the DuPont formula, explain the source of this decline.

9. Explain the significance of shareholders’ preemptive rights!

10. Explain An initial public offering (IPO)