GCU ACC670 2020 August Week 4 Discussion (dq1+dq2) Latest

ACC670 Advanced Financial Statement Analysis

Week 4 Discussion

DQ1 Identify conditions that would lead an analyst to expect that management might attempt to manage earnings upward. Provide a specific example that illustrates this scenario. Do not use items already addressed by your peers. In replies to peers, provide additional supporting examples for this scenario.

DQ2 Assume that a corporation needs to enter the private debt market to raise funds for plant expansion. The corporation expects debt covenants to place restrictions on the levels of its current ratio and total-liabilities-to-assets ratio. Considering the accounts that comprise these ratios, provide examples of accounting estimates, accounting judgments, and structured transactions that the lender should examine closely and explain why each is important. In replies to peers, discuss additional information the lender should consider.