A variety of interested parties-including existing and prospective creditors (such as lenders and suppliers), employees and managers, shareholders, regulators, security analysts, and competitors-conduct the analysis of a business's financial condition and performance. All parties tend to be interested, to some extent, in the same aspects of company performance, but their particular emphasis on a specific facet of the business's condition or performance may vary. e following parties are either currently affiliated with Global Products Inc. (GPI) or are considering becoming so. Based on the following descriptio answer the question "Who Am I?" and (2) identify the class of financial ratios that they might be interested in. ell materials to GPI and could go out of business quickly if I don't collect the payments for my goods. When I perform a ratio analysis of my tomers, I should focus on the following: Does GPI pay its current bills in full and on time? This is reflected by GPI's Because GPI can pay my bill using either current earnings or borrowed fun debt management ratios. for me to examine GPI's
A variety of interested parties-including existing and prospective creditors (such as lenders and suppliers), employees and managers, shareholders, regulators, security analysts, and competitors-conduct the analysis of a business's financial condition and performance. All parties tend to be interested, to some extent, in the same aspects of company performance, but their particular emphasis on a specific facet of the business's condition or performance may vary. e following parties are either currently affiliated with Global Products Inc. (GPI) or are considering becoming so. Based on the following descriptio answer the question "Who Am I?" and (2) identify the class of financial ratios that they might be interested in. ell materials to GPI and could go out of business quickly if I don't collect the payments for my goods. When I perform a ratio analysis of my tomers, I should focus on the following: Does GPI pay its current bills in full and on time? This is reflected by GPI's Because GPI can pay my bill using either current earnings or borrowed fun debt management ratios. for me to examine GPI's
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A variety of interested parties—including existing and prospective creditors (such as lenders and suppliers), employees and managers, shareholders, regulators, security analysts, and competitors—conduct the analysis of a business’s financial condition and performance. All parties tend to be interested, to some extent, in the same aspects of company performance, but their particular emphasis on a specific facet of the business’s condition or performance may vary.
The following parties are either currently affiliated with Global Products Inc. (GPI) or are considering becoming so. Based on the following description, (1) answer the question “Who Am I?” and (2) identify the class of financial ratios that they might be interested in.
I sell materials to GPI and could go out of business quickly if I don’t collect the payments for my goods. When I perform a ratio analysis of my customers, I should focus on the following:
1. Does GPI pay its current bills in full and on time? This is reflected by GPI’s ________ ratios.
2. Because GPI can pay my bill using either current earnings or borrowed funds, it is important for me to examine GPI’s ________ and ________ ratios, respectively.
3. I’m also interested in how efficiently GPI manages its inventories and supplies. I should examine GPI’s ________ ratios—because they provide me with an indicator of the frequency that inventories are converted and sold. This could suggest GPI’s need to increase or shrink its purchases from me.
Who Am I?
I am _______________________.
The diagram includes a dropdown menu with options for different classes of financial ratios: debt management, asset management, liquidity, profitability, and market value.
Transcribed Image Text:**Analysis of Business Financials and Stakeholders' Interests**
A variety of interested parties—including existing and prospective creditors (such as lenders and suppliers), employees and managers, shareholders, regulators, security analysts, and competitors—conduct the analysis of a business’s financial condition and performance. All parties tend to be interested, to some extent, in the same aspects of company performance, but their particular emphasis on a specific facet of the business’s condition or performance may vary.
---
**Scenario Analysis for Financial Affiliates of Global Products Inc. (GPI)**
The following parties are either currently affiliated with Global Products Inc. (GPI) or are considering becoming so. Based on the following description, (1) answer the question “Who Am I?” and (2) identify the class of financial ratios that they might be interested in.
**Scenario:**
I sell materials to GPI and could go out of business quickly if I don’t collect the payments for my goods. When I perform a ratio analysis of my customers, I should focus on the following:
1. **Payment of Current Bills:**
- Does GPI pay its current bills in full and on time? This is reflected by GPI’s __________ ratios.
2. **Ability to Pay Using Earnings or Borrowed Funds:**
- Because GPI can pay my bill using either current earnings or borrowed funds, it would be prudent for me to examine GPI’s __________ ratios, respectively.
3. **Management of Inventories and Supplies:**
- How efficiently GPI manages its inventories and supplies—as indicated by its __________ ratios—because they reveal the efficiency that inventories are converted into finished goods and sold. This could suggest GPI’s need to increase efficiency.
Options for ratios:
- Profitability and debt management
- Asset management and market value
- Market value and debt management
**Determining Your Role:**
Who Am I?
- I am __________.
These analyses help in understanding the financial stability and operational efficiency of a business, guiding stakeholders on their relationship with the entity.
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