Discuss the various categories of financial ratios used in
financial statement analysis. Provide at least two examples of each
type of ratio and discuss what the particular ratio tells us about
the performance of a company. (Essay question)
List and define TWO ratios generally used by
investors and creditors to measure a company's ability to pay
current liabilities.
List and define TWO ratios generally used by investors and
creditors to measure a company's ability to sell inventory and
collect receivables.
List and define TWO ratios generally used by
investors and creditors to measure a company's ability to pay
long-term debt.
List and define TWO ratios generally used by investors and
creditors to measure a company's profitability.
List and...
Financial Ratios fall into five general categories
liquidity, activity, debt, profit-ability and market
ratios.
1. Define each ratio:
2. As an investor describe how each ratio can be used to gain
insight on a company's performance and its future.
1. Research the Financial Statement for Verizon Communications
Inc.
2. Define the following ratios, include the ratio for your
business and explain what each ratio means for the business moving
forward.
Return on assets
Return on equity
Return on capital
Gross margin
SG&A margin
Current ratio
Quick ratio
Total debt/equity
Total revenue
Gross profit
3. Explain which ratios you feel are most important for the
business and why.
You can refer to the attached table or use the following
website.......
Describe the three categories of ratios used in ratio analysis.
When working on assessing the company you chose, which of these
ratios do you think is the most important indicator of successful
performance, why
Financial ratios can be divided into four categories, depending
upon the purpose of the analysis. Discuss the four categories:
internal liquidity, operating performance, risk analysis and growth
analysis.
Requirements: 250 words
Define the major financial indicators and ratios used to assess
financial standing, and for the purpose of financial analysis of a
corporation. State the significance of each.
a) Describe the main categories of financial ratios and discuss
how financial ratios can facilitate the financial analysis. [10
marks]
b) Discuss the effect of FIFO (First In First Out) and LIFO
(Last In First Out) methods on the balance sheet and income
statement during periods of inflation.
c) Describe what are the common-size financial statements and
explain why corporations use them.
d) Under what circumstances can a firm increase its share price
by cutting its dividend and increasing its...
explain the purpose of financial statement analysis, describe
the primary techniques used in financial statement analysis, and
finally, discuss the problems associated with financial statement
analysis.