1a.
The difference between the current assets and current liabilities of the company is represented by
Working capital
2a.
The relationship between net credit sales and average
Accounts receivable turnover
3a.
Times interest earned ratio indicates how many times the interest charges are covered by the profits available to pay interest charges. A high times interest earned ratio usually indicates that a company is performing well and is less risky, and vice versa.
Time interest earned ratio
4a.
The relationship between net income and net sales is established by the net profit margin ratio. It displays the net income earned as a percentage of net sales. Investors can use the net profit margin ratio to compare the performance of the company among competitors.
Net profit margin percentage
5.
Ratio analysis is a tool for determining the relationship between various items. It is used to assess a company's financial performance using values from the income statement, balance sheet, statement of
The preference of the management.
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Chapter IE Solutions
MANAGERIAL ACCOUNTING CONNECT ACCESS
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