Question 1

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a) Explain THREE (3) legal forms of business. (9 marks) b) Distinguish between money market and capital market. (8 marks) () Explain principle-agent relationship and firm's management compensation plan to ensure the agents interests are aligned with principles. (8 marks)a} Explain the comparison that can be done by using nancial ratios. {1 II! marks} b} For its most recent year a company had Sales {all on credit) of $33 and ICost of Goods Sold of $525,. At the beginning of the year its Accounts Receivable were $B,l} and its Inventory was $1D. At the end of the year its Accounts Receivable were $86 and its Inventory was $1l.. Required: Using the above informationr estimate the followings: i} Average accounts receivable for the year. ii]I Average inventory for the year. iii] Accounts receivable turnover ratio for the year. iv] Inventory turnover ratio for the year. v} Average days of sales for Accounts Receivable during the yea r. {15 marks}