Financial ratio analysis is conducted by four types of analysts: managers, equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios

Three common tools of financial analysis are: Multiple Choice O Financial reporting, sensitivity analysis, transactional analysis. Fair presentation, variance analysis, financial reporting. Horizontal analysis, vertical analysis, ratio analysis. Liquidation analysis, political analysis, fair value analysis. Relativity analysis, financial reporting, fair value analysis.

Financial ratios utilized to manage a business falling under the categories of profitability,asset utilization,liquidity,& debt utilization.

5. Know the calculations for all of the following ratios (see ratio sheet that can be used on the exam) and know the category (listed in Question 4) they fall in: Formula Category/Use Ratio Working Capital Current Assets - Current Liabilities Net credit sales/Average Accounts Receivable Turnover accounts receivable Asset Turnover Net sales/Average total assets Net income/Average total stockholders' equity Total liabilities/Total stockholders equity Net income/Net sales Return on Equity (ROE) Debt to equity Return on Sales (ROS) (also known as Net Margin Current Assets/Current Liabilities Cost of goods sold/Average inventory Quick assets/Current Current Ratio Inventory Turnover Quick Ratio liabilities Dividend Yield Dividends per share/Market price per share Net earnings available for common stock/Number of outstanding common shares Net income/Average total Earnings per Share (EPS) Return on Investment (ROI) assets Price Earnings Ratio (P/E) Market price per share/Earnings per share…

Identify at least two different ratios from the standpoint of an investor or creditor in determining the financial health of an organization. Describe how the measure is calculated and the reason for selecting the two ratios that you chose.

Which of the following is NOT a type of ratio analysis used by managers to interpret the numbers in financial statements? O liquidity O operating O activity O profitability

To evaluate a company’s performance, investors need a benchmark to which they can compare its financial ratios. What are some of the problems associated with these comparisons?

Explain how the credit analyst's focus will differ from the investment analyst's focus. What do each of the following ratios measure? Liquidity ratios Activity ratios Leverage ratios Profitability ratios Market ratios Explain the difference between Horizontal and Vertical analysis.