Full Answer Section

dentify two different stock exchanges in the United States.

Here are two different stock exchanges in the United States:

• New York Stock Exchange (NYSE): The NYSE is the oldest and largest stock exchange in the United States. It is home to some of the most well-known companies in the world, such as Apple, Microsoft, and Amazon.
• NASDAQ: The NASDAQ is the second-largest stock exchange in the United States. It is known for trading technology stocks and other growth-oriented companies.

Describe the similarities and differences between the two stock exchanges.

The NYSE and the NASDAQ are similar in a number of ways. Both exchanges are regulated by the Securities and Exchange Commission (SEC). Both exchanges also have a number of rules and regulations that govern trading.

However, there are also some key differences between the two exchanges. The NYSE is a physical exchange, while the NASDAQ is an electronic exchange. This means that trading on the NYSE takes place on a trading floor, while trading on the NASDAQ takes place over a computer network.

The NYSE also has a higher minimum listing requirement than the NASDAQ. This means that companies must meet more stringent financial requirements in order to be listed on the NYSE.

Explain how a company’s free cash flow impacts its growth potential.

A company’s free cash flow is the amount of cash that a company has available after it has paid for its operating expenses and capital expenditures. Free cash flow is an important measure of a company’s financial health because it indicates how much money the company has available to invest in growth.

Companies with strong free cash flow are more likely to be able to invest in growth opportunities, such as new product development, acquisitions, or expansion into new markets. This can lead to higher earnings growth and increased shareholder value.

Cite the free cash flow of example companies.

Here are the free cash flow of two example companies:

• Apple: Apple had free cash flow of $102.9 billion in 2020.
• Microsoft: Microsoft had free cash flow of $67.2 billion in 2020.

Identify one company on each of the two stock exchanges you researched in 1.

Here is one company on each of the two stock exchanges I researched in 1:

• NYSE: Apple
• NASDAQ: Microsoft

Determine the free cash flow from 2019 and 2020 for each company.

Here is the free cash flow from 2019 and 2020 for each company:

• Apple:
  • 2019: $95.3 billion
  • 2020: $102.9 billion
• Microsoft:
  • 2019: $55.3 billion
  • 2020: $67.2 billion

What inferences can you draw from the companies’ free cash flow?

The free cash flow of both Apple and Microsoft has increased significantly in recent years. This suggests that both companies are generating more cash from their operations and are able to invest more in growth.

Apply financial ratios to evaluate the strengths and weaknesses of stocks as investments.

Financial ratios are a set of metrics that can be used to assess the financial health of a company. They can be used to evaluate the strengths and weaknesses of stocks as investments.

Here are two financial ratios for each of the following categories: liquidity ratios, asset management ratios, and profitability ratios:

• Liquidity ratios:
  • Current ratio: The current ratio measures a company’s ability to meet its