Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Textbook Question
Chapter 7, Problem 2Q
Financial ratio analysis is conducted by managers, equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios?
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Financial ratio analysis is conducted by managers, equity investors, longterm creditors, and short-term creditors. What is the primary emphasis ofeach of these groups in evaluating ratios?
The ratio group most likely to be used to indicate a firm's ability to meet short-term financial obligations would be ____.
a.
activity ratios
b.
financial leverage ratios
c.
profitability ratios
d.
liquidity ratios
Business ratios of financial statements are generally categorized as one of the following areas, EXCEPT
Select one:
a.
Leverage
b.
Profitability
c.
Net Present Value
d.
Liquidity
e.
Efficiency (or Activity)
Chapter 7 Solutions
Intermediate Financial Management (MindTap Course List)
Ch. 7 - Define each of the following terms:
Liquidity...Ch. 7 - Financial ratio analysis is conducted by managers,...Ch. 7 - Prob. 3QCh. 7 - Profit margins and turnover ratios vary from one...Ch. 7 - How might (a) seasonal factors and (b) different...Ch. 7 - Why is it sometimes misleading to compare a...Ch. 7 - Greene Sisters has a DSO of 20 days. The companys...Ch. 7 - Vigo Vacations has $200 million in total assets,...Ch. 7 - Winston Watch’s stock price is $75 per share....Ch. 7 - Reno Revolvere has an EPS of $1.50, a cash flow...
Ch. 7 - Needham Pharmaceuticals has a profit margin of 3%...Ch. 7 - Prob. 6PCh. 7 - Ace Industries has current assets equal to 3...Ch. 7 - The Morrit Corporation has $600,000 of debt...Ch. 7 - The Kretovich Company had a quick ratio of 1.4, a...Ch. 7 - Data for Lozano Chip Company and its industry...Ch. 7 - Prob. 14PCh. 7 - Why are ratios useful? What three groups use ratio...Ch. 7 - Prob. 2MCCh. 7 - Calculate the 2019 inventory turnover, days sales...Ch. 7 - Calculate the 2019 debt ratio,...Ch. 7 - Prob. 5MCCh. 7 - Prob. 8MCCh. 7 - Prob. 9MCCh. 7 - What are some qualitative factors that analysts...
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- The debt ratio is used primarily as a measure of: Short-term liquidity. Profitability. Creditors' long-term risk. Return on Investment.arrow_forwardWhat is “benchmarking” and how is it used in financial ratio analysis? Provide an example.arrow_forwardWhat are the siginificance of financial ratios (i.e. current ratio; DSO; TATO; profit margin; ROA; ROI)? How do they help us interpert financial data? What are the differences between ratios (i.e. profiability; liquidity; leverage)? What information do they provide for us?arrow_forward
- Which group of financial statement ratios best captures what investors think of a company’s past performance and future prospects? a. Cash flow ratios b. Liquidity ratios c. Asset management ratios d. Market value ratios e. Profitability ratiosarrow_forwardRatios are used to analyze activities in the following areas: a. asset management; liquidity; profitability; dividend use; debt management, market value b. profitability; asset management; liquidity; debt management; growth, market value c. asset management; liquidity; profitability; debt management, market value d. asset utilization; liquidity; profitability; debt management; security analysisarrow_forwardWhat are the importance of the following financial ratios? Price to earnings ratio. Earnings per share. Return on equity ratio.arrow_forward
- What recommendations can be made to a company based on a ratio analysis? (current ratio, cash ratio, quick ratio, debt ratio, debt-equity ratio)arrow_forwardWhat are the importance of the following financial ratios? Quick ratio. Debt to equity ratio. Working capital ratio.arrow_forwardMatch the ratio to the building block of financial statement analysis to which it best relates.A. Liquidity and efficiency B. Solvency C. Profitability D. Market prospects Times interest earnedarrow_forward
- What are the financial ratios used and what information do they provide?arrow_forwardHow is the use of financial statement ratios?arrow_forwardDividing quick assets by current liabilities is the calculation for the a.ratio of liabilities to stockholders' equity. b.acid-test ratio. c.current ratio. d.return on investment.arrow_forward
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