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Instructions: 1. This assignment is an individual assignment. 2. All students are encouraged to use their own words. 3. Student must apply Saudi Electronic University academic writing standards and...

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Instructions:
1. This assignment is an individual assignment.
2. All students are encouraged to use their own words.
3. Student must apply Saudi Electronic University academic writing standards and APA style guidelines.
4. Support your submission with course material concepts, principles, and theories from the textbook along with at least two scholarly, peer-reviewed journal articles.
5. A mark of zero will be given for any submission that includes copying from other resource without referencing it.
6. It is strongly encouraged that you submit your assignment into the safe assignment Originality Check prior to submitting it to your instructor for grading.
Assignment Question(s):                        (20 Marks)
Q1. a) Name the stock exchange market in Riyadh, KSA and explain its operating activities. (2Marks)
) Read the figure below and answer the questions given :
i. Which section of the balance sheet is the figure about?
ii. What do you understand by par value and excess of par value? Explain.
iii. What is the difference between shares authorized and shares issued and outstanding?
Q2. The following information is related to PQR company and XYZ company for the year 2013:
    
    
    PQR Company
    XYZ Company
    Cash dividend declared and paid during the yea
    $750,000
    $124,800
    Common stock
    $25,000,000
    $12,000,000
    Number of shares of common stock outstanding
    50,000
    24,000
    Par value of a share
     $50
    $50
    Market value of a share
    $60
    $52
Both the companies belong to same industry. PQR is an old and well-established company where as XYZ is a new company. The historical data shows that the PQR has a stable annual dividend distribution to stockholders.
Required:
Calculate dividend yield ratio of both the companies. Which company would you recommend for investment in shares? Explain with reasons.
Q3 Corporations must disclose their financial reports to their stakeholders which should be publish in annual reports of the corporation. Download an annual report of any corporation in KSA and study the Cash flow statement prepared by them to answer the following questions:
1. Explain in detail how the cash flow statement was prepared by the corporation.
2. Which method was used to prepare the statement? Explain the other method that can be used to prepare cash flow statement, with numerical examples.
3. Calculate the corporations cashflow on total asset ratio and explain how this ration can help the management.
Q4. Why does the management of any companies analyze financial statements? Explain by using the different tools in analyzing financial statement with proper numerical example.
Answered Same Day Jul 06, 2021

Solution

Sumit answered on Jul 08 2021
110 Votes
A1
a). The stock exchange market in Riyadh, KSA is known as Tadawul. It was approved by the council of Ministers on 19th March, 2007. It was established as a joint stock company in accordance with Article 20 of the Capital Market Law.
It is the sole entity authorized in the Kingdom of Saudi Arabia to act as the Securities Exchange. It mainly ca
ies on listing and trading in securities as well as transfer, deposit, clearing and settlement and registry of ownership of securities traded on exchange.
(Source: https:
www.tadawul.com.sa/wps/portal/tadawul/home?locale=en, The official website of Tadawul)
).
i). The figure related to Ownership Equity section of the Balance sheet. In this section all the details relating to shareholders funds is written. All the details relating to Authorized, Issued and Paid up capital is given along with amount in reserves.
ii. Par value refers to the value assigned by the company to its share. This value is generally printed on the Share certificate. It signifies the maximum liability of each share in case of liquidation of the company. Excess of par value refers to the value paid by holder in excess of the par value of share. It is also called as premium on shares. If a company is doing good its share is generally quoted at high premium.
(Source: Additional Paid-in Capital by Well Kenton written on 23th August, 2019)
iii). Authorized shares are the maximum number of shares a company is allowed to issue as per its Article of Association. Share Outstanding is the number of shares issued by a...
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