1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
insens350 [35]
3 years ago
8

Ratio analysis A company reports accounting data in its financial statements. This data is used for financial analyses that prov

ide insights into a company's strengths, weaknesses, performance in specific areas, and trends in performance. These analyses are often used to compare a company's performance to that of its competitors, or to its past or expected future performance. Such insight helps managers and analysts improve their decision making.There are several groups of ratios most decision makers and analysts use to examine different aspects of a company's performance. Based on the descriptions of ratios listed, identify the relevant category of ratios.Ratios that help determine whether a company can access its cash and pay its short-term obligations are called______ratios.Ratios that help determine the efficiency with which a company manages its day-to-day tasks and assets are called______ratios.Ratios that help assess a company's ability to service the interest and repayment obligations on its long-term debt and the degree to which it uses borrowed versus invested financial capital are called______ratios. _______ratios help measure a company's ability to generate income and profits based on its invested capital.______ratios examine the market value of a company's share price, its profits and cash dividends, and the book value of the firm's assets and relate them to other data items to determine how the firm is perceived in the stock market. Ratio analysis is an important component of evaluating company performance. It can provide great insights into how a company matches up against itself over time and against other players within the industry. However, like many tools and techniques, ratio analysis has a few limitations and weaknesses. Which of the following statements represent a weakness or limitation of ratio analysis? A. Seasonal factors can distort data B. Window dressing might be in effect. C. Market data is not sufficiently considered.
Business
1 answer:
ICE Princess25 [194]3 years ago
6 0

Answer: 1. a. Liquidity Ratios

b. Activity Ratios

c. Financial Ratios

d. Profitability Ratios

e. Market Value Ratios

2. A. Seasonal factors can distort data

B. Window dressing might be in effect.

Explanation:

a. Liquidity Ratios give the company an idea of it's ability to access hard currency. Examples include the Current ratio and the Quick ratio.

b. Activity Ratios allows stakeholders know how efficient the company is at running daily operations. Examples include; Receivables Turnover and Asset Turnover ratios.

c. Financial Ratios are very important to the company as they can decide if a company will be able to get loans. They include ratios that measure the firm's ability to pay off debt as well as the overall condition of the firm in terms of it's finances.

Examples include; Net Profit Margin and Debt to Asset ratio.

d. Profitability Ratios

These help ascertain the ability of the business to make returns based on its resources. Examples include Return on Assets and Return on Equity.

e. Market Value Ratio

These essentially help the company and other stake holders know what the company is worth in the market. An example is the Book Value per Share ratio.

2. Seasonal Factors may indeed distort data depending on the type of industry that the firm is into and ratios will usually not show this. For instance, an Ice Cream company will not have strong sales in winter so when interpreting ratio analysis it would be important to note that this could happen.

Another weakness is that ratios are calculated based on the figures that are given by a company. These figures may not truly reflect the actual situation of the company when management supply more optimistic figures than is true. This is called Window Dressing.

It will have the effect of distorting the ratios so that they do not represent a true representation of the actual situation of the company.

You might be interested in
TVs and VCRs are:<br><br> A. needs<br> B. wants<br> C. resources<br> D. markets
Yanka [14]

Answer:

I believe I is B-wants

Explanation:

7 0
3 years ago
Read 2 more answers
When you go on a hunting trip you should leave a hunting plan with someone you trust what infromation should the plan include?
klasskru [66]
The hunting plan can conclude where you are going hunting and the numbers to call if you are in danger
7 0
3 years ago
Green Landscaping Inc. is preparing its budget for the first quarter of 2017. The next step in the budgeting process is to prepa
Agata [3.3K]

Answer:

a-1. Total cash collection for the Quarter Ending March 31, 2022 = $336,000

a-2. Total cash payment for the Quarter Ending March 31, 2022 = $43,400

b-1. Account receivable balance = $68,000

b-2. Account payable balance = $7,200

Explanation:

Note: This question is not complete and contains different dates (2017 and 2022). The complete question is therefore provided and 2022 is picked as the date before answering the question. See the attached pdf file for the complete question with 2022 as the date.

The explanation of the answer is now given as follows:

a-1. Schedule of expected cash collections from clients.

Note: See part a-1 of the attached excel file for the Schedule of expected cash collections from clients.

From the attached excel file, we have:

Total cash collection for the Quarter Ending March 31, 2022 = $336,000

a-2. Schedule of expected payments for landscaping supplies.

Note: See part a-2 of the attached excel file for the Schedule of expected payments for landscaping supplies.

From the attached excel file, we have:

Total cash payment for the Quarter Ending March 31, 2022 = $43,400

b. Determine the following balances at March 31, 2022:

b-1. Accounts receivable

Account receivable balance = ($120,000*10%) + ($140,000*40%) = $68,000

b-2. Accounts payable

Account payable balance = $18,000*40% = $7,200

Download xlsx
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> xlsx </span>
<span class="sg-text sg-text--link sg-text--bold sg-text--link-disabled sg-text--blue-dark"> pdf </span>
3 0
2 years ago
Sanibel Autos Inc. merged with its competitor Vroom Autos Inc. This allowed Sanibel Autos to use its technological competencies
Nimfa-mama [501]

Answer:

Horizontal integration

Explanation:

Integration is a strategy used by businesses to gain a better market share. It involves cooperating with other business owners to increase sales for both parties.

Horizontal integration is when businesses bate the same level in the value chain collaborate to increase profits.

In the give scenario Sanibel Autos Inc. merged with its competitor Vroom Autos Inc, and Sanibel Autos to use its technological competencies along with Vroom Autos' marketing capabilities to capture a larger market share.

The stage of value chain is when businesses prospect for customers. This interpretation enables them gain more customers.

8 0
3 years ago
Preparing to pay for higher education can start in 9th<br> grade or earlier by...
Anton [14]

Answer:

Applying for grants

Explanation:

8 0
3 years ago
Other questions:
  • One test of evidence is "does the evidence come from unbiased sources?"
    6·1 answer
  • ​the employees of a company feel that rewards are fairly allocated. this illustrates _____.
    14·1 answer
  • Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production
    10·1 answer
  • Admire County Bank agrees to lend Givens Brick Company $600,000 on January 1st. Givens Brick Company signs a $600,000, 8%, 9-mon
    12·1 answer
  • Your town's public library is heavily damaged by a fire. Luckily, no one was hurt, but many of the books were lost. How should A
    11·1 answer
  • The supply of shoes dropped. Stores are having a hard time finding enough shoes to sell. What will happen to the price of shoes?
    15·1 answer
  • Preferred Stock Valuation Farley Inc. has perpetual preferred stock outstanding that sells for $30 a share and pays a dividend o
    6·1 answer
  • In September 2019, the budget committee of Jason Company assembles the following data: 1. Expected Sales October $1,800,000 Nove
    9·1 answer
  • You need to have $32,250 in 9 years. You can earn an annual interest rate of 4 percent for the first 5 years, and 4.6 percent fo
    13·1 answer
  • Danaher Corporation manufactures a variety of products, including electronic measurement instruments and network communications
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!