Discussion Board Essay Example | Topics and Well Written Essays - 250 words - 9

Discussion Board - Essay Example Therefore, the equilibrium quantity is determined by output amount a firm decides to supply. For instance, Samsung and Nokia companies are all phone companies and their demand in the market is determined by equilibrium where price is given in the market and not by demand or supply forces. The government intervention has a strong influence on a willing late comer to join the market industry. Government interventions may allow late comers to challenge those who entered first in the market. If they do so, there is a shift of extra returns by government intervention in a particular firm from another state to the national economy. For instance, a real life situation is whereby if China can be allowed to supply phones to America, there will be a reduction in returns received by phone making companies in America as they will not enjoy all the profits as before. Financial ratios are designed with the aim of determining the weaknesses and strengths of a firm. The investors need financial analysis to know the riskiness of cash flows and future cash flows of a firm. An individual is able to know a company’s strength or weakness by analyzing the past performance of the firm and mapping it to the future plans. The analysis is mainly done by analyzing financial statements. For instance, in debt ratio, the greater the ratio, the lower the protection that can be afforded by creditors upon liquidation (Hacker,