When financial data is presented to company management

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Problem 1: The following financial ratios (ratios) are for the company ProTeam Sport as of December 31. The current ratios for years 1 and 2. What conclusion can the company make based on this information?

                                 20x1             20x2

Current Ratio          1.2                0.7

1- The current ratio has decreased and ProTeam Sports is currently not able to pay its current debts

2- The current ratio has decreased and ProTeam Sports is currently not able to generate income for the company

3- The current reason has improved and ProTeam Sports is currently able to generate income for the company

4- The current ratio has improved and ProTeam Sports is currently able to pay its current debts

Problem 2: When financial data is presented to company management:

1- Each number of both the Income Statement and the Balance Sheet is explained

2- A website like Wikipedia is used to explain what financial information means

3- The calculations are reviewed to determine their accuracy before presenting the data

4- It is explained in detail, using internet sites, to clarify the numbers and check their accuracy

Reference no: EM132934409

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