Principles of Accounting Report
Assignment Question(s): (20 Marks)
Q1. a) Name the stock exchange market in Riyadh, KSA and explain its operating activities. (2Marks)
- b) Read the figure below and answer the questions given :
- Which section of the balance sheet is the figure about?
- What do you understand by par value and excess of par value? Explain.
- What is the difference between shares authorized and shares issued and outstanding?
Q2. The following information is related to PQR company and XYZ company for the year 2013:
| PQR Company | XYZ Company | |
| Cash dividend declared and paid during the year | $750,000 | $124,800 |
| Common stock | $25,000,000 | $12,000,000 |
| Number of shares of common stock outstanding | 50,000 | 24,000 |
| Par value of a share | $50 | $50 |
| Market value of a share | $60 | $52 |
Both the companies belong to same industry. PQR is an old and well-established company where as XYZ is a new company. The historical data shows that the PQR has a stable annual dividend distribution to stockholders.
Required:
Calculate dividend yield ratio of both the companies. Which company would you recommend for investment in shares? Explain with reasons.
Q3 Corporations must disclose their financial reports to their stakeholders which should be publish in annual reports of the corporation. Download an annual report of any corporation in KSA and study the Cash flow statement prepared by them to answer the following questions:
- Explain in detail how the cash flow statement was prepared by the corporation.
- Which method was used to prepare the statement? Explain the other method that can be used to prepare cash flow statement, with numerical examples.
- Calculate the corporations cashflow on total asset ratio and explain how this ration can help the management.
Q4. Why does the management of any companies analyze financial statements? Explain by using the different tools in analyzing financial statement with proper numerical example.