Reference no: EM132890736

1) We have likely all heard the phrase that time is money, or money is time. While that is very true, time value of money has a different meaning from a financial perspective. In fact, time value of money has a number of components associated with it's meaning. For now, who can define this topic in broad terms? Specifically, what is the meaning of time value of money?

2) Last week, we identified the primary financial statements found in organizations. This week, we are going to explore ratio analysis as it applies to financial statements. Who can describe what ratio analysis is and why is it an important area of financial management? Is ratio analysis limited to financial statements?

How could I best respond to the below post, with helpful information?

Time value of money is when money is being worth more than in the future. A good example of this is our current housing market. My wife and I are building a home, the home should be completed in about a month(started in October). When we signed our contract in October the price of the home was $366,000. Fast forward till today and our same home's base price if a searching home owner were to purchase it is now $410,000. The money we had to put down and sign the contract was worth more than the money if I were to have bought that home today because my money was worth more then then it is today. The homes value is worth more today than it was months ago but that money wouldn't be realized until the home is sold, and even then if the market is high it would be worth more, but the market has the potential to drop in the future causing that money to be worth less.