Question Description

Deliverable Length: 400-600 words

Jessica Madison has been working as an accounting intern for ABC for the past 3 years. Jessica has recently completed her BA degree and aspires to become a financial analyst at ABC. You have agreed to set aside a time each week to help Jessica become more familiar with various investment management fundamentals.

Explain the following to Jessica:

  • How does ratio analysis serve as an effective tool to assess the current and future financial status of firms? Describe the limitations of ratio analysis.
  • Explain the odd-lot theory and how it acts as a market predictor.
  • How does a fundamental type of analysis, such as ratio analysis, differ from a technical analysis?