Financial Class
Calculating Ratios Short Answer
1. What is “agency theory?” How can setting the appropriate goals for the firm minimize the agency problem? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
2. Differentiate between profit maximization and wealth maximization. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
3. Why must organizations focus on both shareholder wealth and the stakeholders? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
4. Differentiate between the three financial statements with which managers should be familiar. How are they linked? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
2 references are needed APA-formatted citation and APA style