? Why must preferred stock dividends be subtracted from net income in computing earnings per share? Why is common stock usually not issued at a price that is less than par value?
? What three conditions must exist before a cash dividend is paid? Contract the effects of a cash dividend and a stock dividend on a corporationÂ’s balance sheet.
? Why are companies required to prepare a statement of cash flows? Why is the statement of cash flows divided into three sections? What does each section tell you about the operations of a company?
? What are some common ratios used to analyze financial information? Which are the most important? What are some examples of how ratios are used in the decision making process?