Owners Of A Corporation Can Maximize The Object Of The Firm And Satisfy
Yes, the owner of a corporation can maximize the objects; it is possible because, in this case, clients or the customers can be satisfied. The corporation may design or make the product according to desire or requirement of the customers so that customers can be retained and their can competitive growth in the industry or market. However, for the benefits of the society, the socially imposed constraint can be made as it can also be benefited for the corporation of the company.
The company does not require the access to the annual reports, priors to the Sarbanes-Oxley Act of 2002, because of the special section 404, which took effect on November 14, 2004. However, the internal control structure, related to the financial result were never assessed, but now after the Sarbanes-Oxley Act, the auditors evaluate the internal control structure, related to the financial results, so that the processes of management could be known. Moreover, the act can prevent the company from the scandals, example, Tyco, Adelphia, Enron, WorldCom etc. The Sarbanes-Oxley Act has created the ethical standards, also known as the Sarbox and creates the PCAOB, (Public Companies Accounting Overweigh Board), the outside auditors can do the annual audits.
Type Of Analyses Done By Using Financial Ratios
There are the different analyses, which can be done under the financial ratios; financial ratios can investigate and compare the relationship between the financial information, while utilizing the financial ratios, there is need to do the analysis, through the tool and need to calculate the each, through comparing the numbers, it can be known that how other numbers are computed.
Financial Ratios can be described in the following categories
- Turnover or asset management
- Liquidity or short-term solvency
- Financial leverage or long-term solvency
- Market value
The financial statement analysis is done through, in relation to the market data and the accounting data, however, no theory is there, to guide about the establishing benchmark, through which quantities can be known. The judgment could be done while assessing the value and risks, related to the economic logic and financial theory. Moreover, the accurate judgments are not present in the financial statements, so it is difficult to know about the the high or low value or the ratios that matter.