Ratio Analysis Memo

Common stockholders are the basic owners of a corporation, but few stockholders of large corporations take an active role in management. Instead, they elect the corporation’s board of directors to represent their interests. Board members seldom get involved in the day-to-day management of the company. They establish the basic mission and goals of the corporation and appoint

• Control: An S- Corporation only allowed a small number of shareholders and the shareholders must be

* The control of the corporation is managed by an elected board of directors. The officers in the company normally have to be approved by the board of directors before they are offered a position to lead the company.

Longevity/Continuity: C-Corporations can have a perpetual existence. The deaths of stockholders and employees will not cause it to cease operation. However, a stockholder vote can be called to close the

2. Limited Life. In many states, when a member leaves an LLC, the business is dissolved and the members must fulfill all remaining legal and business obligations to close the business

Board Of Directors on top of the top managers, there is a board of directors and those people represent or elected by the stockholders to establish corporate management's policies and making the decisions on major corporation issues. These are the example of the board of directors in McDonald : Andrew J. McKenna, Susan E. Arnold, Robert A. Eckert, Enrique Hernandez and Jr. Jeanne P. Jackson.

Longevity and or Continuity- Most corporations are categorized in different tax entities, Corporations can last forever or they can be set to a limited duration period.

$10,644,800 / $2,271,400 = 4.69 Times Return on Common Stockholders’ Equity (2002) $647,645 / $1,928,960 = 33.58% Return

9. Debt service coverage = (Net Income + Interest + Depreciation) in Statement of Operations/ Interest + Principal Payments ($10 million assumed for this assignment)

Common stock makes up the majority of stock issued. Common stock owners have ownership in the company and claim dividends. They also get one vote per share to elect board members. Common stock yields

Firms and Companies include ‘Ratios’ in their external report to which it can be referred as ‘highlights’. Only with the help of ratios the financial statements are meaningful. It is therefore, not surprising that ratio analysis feature are prominently in the literature on financial management. According to Mcleary (1992) ratio means “an expression of a relationship between any two figures or groups of figures in the financial statements of an undertaking”.

Like most multinational corporations, the shareholders own the company and they may also be the board of directors. A Chief Executive Officer (CEO) will be appointed to nominate and manage the operation of the company as a whole. A Chief Operating Officer (COO) will be managing the company’s day-to-day operations and reports them to CEO. The Chief Financial Officer (CFO) will be managing the finance and account together with the

With a desire to be an entrepreneur, Shania has to determine what type of business structure that best represents her business. There are a variety of business structures that Shania can use to establish her business. These specific types are a sole proprietorship, corporation, partnership, limited partnership, limited liability company, and a few others (U.S. Small Business Administration, 2015). Each of these structures has their unique differences and characteristics.

quantity of net income dollars of company earned for each dollar invested by the owners was 8.5% in 2010 and 10.4% in 2011 reflecting an increase of 1.9%. After analyzing the solvency ratios the following highlights were found: Riordan’s debt of totals assets ratio indicates company’s capability to survive losses without spoiling the interests of creditors. For 2010 was 14% and during 2011 was 29.4%, showing an increase of risk of 15.4% (higher the number, higher the risk that leads the company to be unable to meet its maturing obligations). The company’s time’s interest earned ratio that determines company’s capability to meet interest payments as they come due was 26.9 in 2010 and 8.3 in 2011. A high ratio on times interest earned may lead to investors to think that a company has an undesirable lack of debt or is paying down too much debt with earnings that could be used for other projects (Investopedia, 2013). Subsequently evaluating our performance and efficiently of the collected data, it reveals that Riordan Manufacture has displayed remarkable progress in comparison between years 2011 and 2010. The company liquidity demonstrates that we are capable to

Stocks is also known as an equity securities, or corporate stock, a stock represents a share of ownership in a business and a claim on a proportional share in the corporation’s assets and gains, as determined by the number of shares a shareholder possesses divided by the total number of outstanding shares. Most stock provides shareholders with voting rights in certain corporate decisions. Only corporations issue stocks. The benefits of stocks make them appealing to corporations and individuals. Traditionally, stocks were issued as