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Andrei [34K]
2 years ago
9

Financial Statement Analysis, specifically Ratio Analysis is often performed by managers, investors, and creditors. What is the

primary goal of each of these groups when evaluating ratios
Business
1 answer:
IceJOKER [234]2 years ago
7 0

Answer:

The primary goals of managers, investors, and creditors when evaluating ratios are:

1. Managers use ratio analysis to evaluate their performance, understand financial results and trends, and determine the strengths and weaknesses of different strategies and initiatives.

2. Investors perform ratio analysis of the financial statements of companies in order to evaluate the financial health of the companies and estimate likely future performances.  By performing ratio analysis, investors can determine how a company receives financing, uses resources, settles maturing debt obligations, and generate profits.

3. On the part of creditors, they are always interested in knowing if a company is overtrading, uses debt resources efficiently, is credit-worthy, and has the ability to repay.

Explanation:

Ratio analysis reveals important insights about a company's profitability, liquidity, operational efficiency, and overall solvency.  Ratio analysis shows a company's performance in important indices over time.  It can also be used as a tool to compare one company with another, especially if they are in the same industry or economic sector.  Various stakeholders, including managers, creditors, investors, and employees, use ratio analysis to understand the company's value creation ability.

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H. Cochran Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2,3
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Identify whether the statements below are true or false by dragging and dropping the appropriate term into the bin provided.
Tema [17]

<u>Solution and Explanation:</u>

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3 years ago
On June 18, Wyman Company (a U.S. Company) sold merchandise to the Nielsen Company of Denmark for €60,000 (Euros), with a paymen
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Answer:

Wyman company should recognize a foreign exchange loss in the amount of $12,600

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On the date of sale: £1 = $1.35

So £60,000 = 60,000 × $1.35 = $81000

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So £60,000 = 60,000 × $1.14 = $68, 400

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