can you please explain this and provide an example its for homework I am struggling Analysis of the financial status of a company, using financial ratios (e.g., turnover ratios, bookvalue, earnings per share, times interest earned, return on assets).

Answered: • Analysis of the financial status of a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

can you please explain this and provide an example its for homework I am struggling

Analysis of the financial status of a company, using financial ratios (e.g., turnover ratios, book
value, earnings per share, times interest earned, return on assets).

Expert Solution

Step 1

Financial status means Profit, loss, revenue, earning, available cash or cash flow. Financial status means the asset, liability who tell us about the actual position about the organisation.

An organisation runs on the basis of financial statement. If the financial are strong of a company then organization are good and running in a smooth way.

Now, how to analyse the stability of the company or an organisation.

There are many points to check the stability of the company

1. Financial statement

2. Net worth

3. Financial ratios