1. Explain the balance sheet equity ratio, how it is calculated and what information about the company it conveys. The equity ratio is a financial ratio taken from the balance sheet and indicates the proportion of equity used to finance assets. of the company.Equity ratio is calculated by dividing shareholders' equity by total assets.Equity ratio = Equity / Total assetsFor example, • Low equity ratio means high risk for creditors. • A high equity ratio shows high shareholder contributions to total assets. capital.It is important to maintain a reasonable equity ratio, because the level of leverage makes it possible to obtain loans or capital requirements from financial institutions, therefore, more attractive interest rate options are proposed.2. Explain why analyzing business performance is about more than just numbers. Successful business performance analysis is about more than annual reports. Environmental issues provide additional information about how the company is affected by the market. Today, the Internet provides accessible and relevant information on the business market. Aspects that must be considered by an investor are: Competitors (direct and indirect) How and what are competitors doing? In order to obtain information on new products, new strategies or technological announcements that would impact the market. Besides, Marc Zuckenber is a concrete example, why invest in a new company that doesn't even generate profits? That's exactly what he did with Snapchat. The reason for investing in such a low-valued company is for him to monopolize social media to a certain extent, avoiding competitors. It is not a...... middle of paper ......el, legal fees, accounting fees, insurance, depreciation, rental commissions.• Operating profit/loss is the result of deduction of operating expenses from gross profit. Operating profit represents the company's earnings on a regular basis before paying interest or taxes. • Non-operating profit/loss relates to interest paid for the business and special items or extraordinary expenses such as restructuring charges that are unusual. must be allocated to non-operating income. Extraordinary expenses are carefully monitored, as they are one-time charges that can reduce profits. • Income taxes are an estimate of the federal, state, or municipal taxes that will be paid. • Net income is the bottom line that shows the profitability of the business. It is calculated by deducting total operating expenses from gross profit..