What is agency theory how can setting the appropriate goals


Part A-

1. Spreading the Financial Statements Spread the balance sheets and income statements of Lake of Egypt Marina, Inc., for 2015 and 2014.

2. Calculating Ratios Calculate the following ratios for Lake of Egypt Marina, Inc., as of year-end 2015.

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Part B- Calculating Ratios Short Answer

1. What is "agency theory?" How can setting the appropriate goals for the firm minimize the agency problem?

2. Differentiate between profit maximization and wealth maximization.

3. Why must organizations focus on both shareholder wealth and the stakeholders?

4. Differentiate between the three financial statements with which managers should be familiar. How are they linked?

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