Reference no: EM131536055

Question: As Baldwin Company controller, you are responsible for informing the board of directors about its financial activities. At the board meeting, you present the following information.

After the meeting, the company's CEO holds a press conference with analysts in which she mentions the following ratios.

                                                         2011            2010               2009

Sales trend percent . . . . . . . . . . . . . . 147.0%        135.0%          100.0%

Selling expenses to sales . . . . . . . . . . 10.1%            14.0%            15.6%

Sales to plant assets ratio . . . . . . . . . 3.8 to 1        3.6 to 1          3.3 to 1

Current ratio . . . . . . . . . . . . . . . . . . 2.9 to 1        2.7 to 1          2.4 to 1

Required: 1. Why do you think the CEO decided to report 4 ratios instead of the 11 prepared?

2. Comment on the possible consequences of the CEO's reporting of the ratios selected.