Why are ratios used to analyze the financial statements of

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Reference no: EM13387481

1. Why are ratios used to analyze the financial statements of organizations?

2. When common size ratios are prepared, each asset is compared to _________ and each expense is compared to ___________. How do common size ratios help compare organizations?

3. How do you evaluate a ratio for a specific year?

4. Why might too much liquidity be a problem for an organization? Why might too little be a problem?

5. Discuss when and why different profitability ratios might be used.

6. Using Tables 14-1 and 14-2 (attached), calculate the current ratio, days cash on hand, days in accounts receivable, total asset turnover, interest coverage, long-term debt to net assets, total margin, and return on assets for 2013. Show your work.

This assignment must be completed no later than Thursday, August 28th by noon EST.

Reference no: EM13387481

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