1- Financial ratio analysis is conducted by three main groups of analysts: credit analysts, stock analysts, and managers. What is the primary emphasis of each group, and how would that emphasis affect the ratios on which they focus? 2- Why would the inventory turnover ratio be more important for someone analyzing a grocery store chain than an insurance company? 3- Over the past year, M.D. Ryngaert & Co. had an increase in its current ratio and a decline in its total assets turnover ratio. However, the company's sales, cash and equivalents, DSO, and fixed assets turnover ratio remained constant. What balance sheet accounts must have changed to produce the indicated changes? 4- Profit margins and turnover ratios vary from one industry to another. What differences would you expect to find between the turnover ratios, profit margins, and DuPont equations for a grocery chain and a steel company?

5- Ratio analysis can be invaluable tools for making decisions about companies you might want to invest in. Across the industry, they are used by individual investors and professional analysts alike. There are a large variety of ratios out there. Which of the financial ratio, i.e. profitability ratios, liquidity ratios, solvency ratios, and valuation ratios will you use to arrive at an investment decision in a firm? Discuss.

Answer rating: 100% (QA)

1 Financial Ratio Analysis by Different Analysts Credit Analysts Their primary focus is on the companys ability to meet its debt obligations They emphasize liquidity ratios eg current ratio quick rati... View the full answer