Question: 1.The income statement captures a company's performance over time, while the balance sheet captures its status at a point in time. What does this mean?

1.The income statement captures a company's performance over time, while the balance sheet captures its status at a point in time. What does this mean?

2.Company A has a ROA of 8% and a ROE of 12%. Company b has a ROA of 7% and a ROE of 15%. What does this tell about the relative levels of debt financing between these two companies? Which company's approach is better? Why?

3.What do we mean by trend analysis and comparative analysis? Why are these tools more useful than looking at the ratios for a single period in isolation?

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