Determine order to assess the financial health of a company

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Question 1: In order to assess the financial health of a company, why do we have to calculate rations? Why can't we simply look at $ amounts of projfits, $ amount of debts or $ amount of sales, etc.?

Question 2: Given the following information, which management team (Company A or B?) is doing a better job and why?

Company A: Sales $100,000 and Profits $10,000

Company B: Sales $10,000 and Profits $4,000

Reference no: EM132478586

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