Question: 2. Please provide a short answer (3-4 sentences) for each question listed. a. Profits might be compared with sales, assets, or stockholders' equity. Why might

2. Please provide a short answer (3-4 sentences) for each question listed.

a. Profits might be compared with sales, assets, or stockholders' equity. Why might all three bases be used? Will trends in these ratios always move in the same direction?

b. Would you expect the profit margin in a quality jewelry store to differ from that of a grocery store? Comment.

c. Give a simple definition of earnings per share.

d. Define financial leverage. What is its effect on earnings? When is the use of financial leverage advantageous and disadvantageous?.

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