Based on the reviews of the Financial Ratios and Trend Analysis, respond to 3 of the following discussion questions. You are encouraged to research…
Based on the reviews of the Financial Ratios and Trend Analysis, respond to 3 of the following discussion questions.
You are encouraged to research outside sources and, of course, cite them. Do not, however, quote sources word-for-word, but rather, do it your own away.
1. What three factors would influence your evaluation as to whether a company’s current ratio is good or bad, why?
2. Suggest several reasons why a 2:1 current ratio might not be adequate for a particular company.
3. Why is working capital given special attention in the process of analyzing balance sheets?
6. Why is a company’s capital structure, as measured by debt and equity ratios, important to financial statement analysts?
After you’ve completed the questions above, please provide a brief explanation of how this information is important in managerial decision making.