1. Given the eventual need for rigorous financial management, should every company have extensive cost controls in place from the first moment of operation? Explain your answer.
2. Google recently had a debt-to-equity ratio of 0.04. Microsoft, one of its key competitors, had a debt-to-equity ratio of 0.15. From a bank’s point of view, which of the two companies is a more attractive loan candidate, based on this ratio? Why?
3. Over the course of a recent six-month period, Google’s current ratio increased from 8.77 to 11.91. Does this make Google more or less of a credit risk in the eyes of potential lenders? Why?