Concept explainers
The Dow Jones Industrial Average (DJIA) is often cited as a key metric for business activity. The average is a mathematical formula that uses the stock prices of thirty companies traded on the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation (NASDAQ) system.
A. Identify several of the companies that are included in the DJIA.
B. Explain why this metric might be commonly used to measure business activity.
C. Research the history of the DJIA and note some interesting facts. When did the Dow begin? What was the first value? What was the lowest value? The following is an example of a website that may be helpful: http://www.dow-jones-djia.com/history-of-dow-jones-industrial-average-index/.
D. What is the current value of the DJIA? What factors might contribute to the difference between early and current values of the DJIA?
Trending nowThis is a popular solution!
Chapter 1 Solutions
Principles of Accounting Volume 1
Additional Business Textbook Solutions
Principles of Management
Cost Accounting (15th Edition)
Horngren's Accounting (11th Edition)
Horngren's Accounting (12th Edition)
Construction Accounting And Financial Management (4th Edition)
Managerial Accounting (5th Edition)
- If you want an indication of the direction a business is taking, you would usea. benchmarking.b. trend percentages.c. industry analysis.d. vertical analysis.arrow_forwardStock exchanges want to be sure that investors have enough information to Select one: O a. Increase a company's performance and prospects O b. Evaluate a company's performance and prospects O c. Decrease a company's performance and prospects d. Evaluate a company's assets and liabilitiesarrow_forwardWhat is the basic purpose for examining trends in a company’s financial ratios and other data?arrow_forward
- Interpretation of the Ratios: This section should include interpretation of the company's ratios along with the trend graphs, and explain how these values can have an impact on the management, operations & stockholders with respect to time series analysis.arrow_forwardDuPont system of analysis Use the following financial information for AT&T and Verizon to conduct a DuPont system of analysis for each company. Sales Earnings available for common stockholders Total assets Stockholders' equity a. Which company has the higher net profit margin? Higher asset turnover? b. Which company has the higher ROA? The higher ROE? c. Which company has the higher financial leverage multiplier? a. Net profit margin (Round to three decimal places.) AT&T Net profit margin AT&T $164,000 13,333 403,921 201,934 Verizon Verizon $126,280 13,608 244,280 24,232arrow_forwardWhat are financial ratios? Using numerical values from financial statements, financial ratios are created to obtain useful information about a company. Using the numbers on a company's balance sheet, income statement, and cash flow statement, quantitative analysis of a company's liquidity, leverage, growth, margins, profitability, rates of return, valuation, and other factors can be performed. Financial analysis ratio is used for 2 main purpose; to track the company’s performance and to make comparative judgements of the company performance. Users from outside: Retail investors, financial analysts, creditors, rivals, tax and regulatory authorities, and industry observers are internal users. Owners, employees, and the management team.arrow_forward
- A common-size balance sheet shows the firm's assets and liabilities as a percentage of ____. a. stockholders' equity b. total assets c. industry averages d. net salesarrow_forwardSet out and explain how the p/e ratio provides a shorthand guide to the market’s assessment of a firm’s business prospects.arrow_forwardWhich of the following types of analysis compares one corporation to another corpora ion and to industry averages? a. timetable analysis c. company analysis b. time series analysis d. cross sectional analysisarrow_forward
- 1. What are some of the tests of a sound or healthy long-term financial position? 2. Give some indications of managerial efficiency in the use of company resources. 3. What are the most commonly used techniques in the analysis and interpretation of financial statements? 4. What are the steps involved in using trend percentages in financial analysis? 5. Distinguish between horizontal and vertical analysis of financial statement data 6. What is the basic objective in looking at trends in financial ratios and other data? 7. Define trendpercentages 8. Discuss the steps in analyzing financial statements using trend percentages. 9. In financial statement analysis, what is the basic objective of observing trends in data and ratios? Suggest some other standards of comparison. 10. Distinguish between trend percentages and component percentages. 11. Which would be better suited for analyzing the change in sales over a term of several years? 12. Nets sales of the Premiere General Store have been…arrow_forwardFrom curiosity, what graphs are made to indicate the financial performance of a company?arrow_forwardChoose the correct. Which of the following is a registration statement used by large companies that already have a significant following in the stock market?a. Form 8–Kb. Form 10–Kc. Form S–1d. Form S–3arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning