Solvency Ratios

Write a 350- to 700-word article analysis in which you identify situations that might lead to unethical practices and behavior in accounting.

Examine the effect of the Sarbanes-Oxley Act of 2002 on financial statements.

Prepare at least one question based on your article analysis for class discussion.

Cite one article from the Electronic Reserve Readings, the Internet, or other resources.

Format your paper consistent with APA guidelines.

Discuss the objectives for Weeks Four and Five. How do they relate to the practice of accounting and its uses in business?

Prepare a statement of cash flows using both direct and indirect methods.

Apply ratio, vertical, and horizontal analysis to financial statements.

Prepare journal entries associated with the issuance of preferred and common stocks and the declaration and payment of dividends.

Identify situations that might lead to unethical accounting practices.

Examine the effect of unethical behavior and the Sarbanes-Oxley Act on financial statements.

Write a 350- to 500-word summary of your Learning Team's discussion.

Resources: Virtual Organizations

Click the Virtual Organization link in the Links Library to access the Virtual Organizations.

Select one of the Virtual Organizations as the basis for the assignment.

Obtain faculty approval of your selected organization before beginning the assignment.

Access the information contained in your selected organization's balance sheet and income statement to calculate the following:

* Liquidity ratios

o Current ratio

o Acid-test, or quick, ratio

o Receivables turnover

o Inventory turnover

* Profitability ratios

o Asset turnover

o Profit margin

o Return on assets

o Return on common stockholders' equity

* Solvency ratios

o Debt to total assets

o Times interest earned

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