Question

Short answers: 2-4 sentences only.

why we have articles of partnership?

why the financial manager has to understand the cash flow of the business he/she works in? (hint: talk about quicker you get cash in, you can put it to use sooner---the manager needs to focus on collecting the cash sooner).

Difference between a dealer and broker.

what are junk bonds?

explain the type of business organization that provides the most control to the owner (hint: sole prop…. explain why).

What is the difference between preferred and common stock?

Answer 1

1.why we have articles of partnership?

Articles of partnership is a formal document that creates an agreement between business partners to combine their labor,capital and share in profit , loss and liability.It acts as a rule book that outlines all the conditions under which parties enter into a partnership.It can be useful in preventing and resolving the disagreements between the partners.

2.why the financial manager has to understand the cash flow of the business he/she works in?

cash flow helps to determine the financial position of a firm.It helps to know the availability of cash in their business.It also helps the financial manager to make short term plans.

3.Difference between a dealer and broker.

A broker is a person who buy and sell securities on behalf of their clients.He is paid a commission for his service.

A dealer is person who buy and sell securities on their own.They make all decisions regarding their purchase.

4.what are junk bonds?

Junk bonds are issued by companies with low credit ratings.It is also know as high-yield bonds.It has high risk and high return.

5.explain the type of business organization that provides the most control to the owner

Sole proprietorship is the simplest form of business.It is completely owned and run by a single person and he is personally responsible for the debts.It does not have to be incorporated or registered.It is not a separate legal entity.

6.What is the difference between preferred and common stock?

Preferred stock do not provide voting rights to the shareholders.Preferred stock enjoys priority in receiving dividends.

Common stock holders have voting rights.It entitles the shareholders to share in the company's profits.