As Beacon 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.

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.

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2021 2020 2019 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 Acid-test ratio . 1.1 to 1 1.4 to 1 1.5 to 1 Inventory turnover 7.8 times 9.0 times 10.2 times Accounts receivable turnover 7.0 times 7.7 times 8.5 times .... Total asset turnover . 2.9 times 2.9 times 3.3 times Return on total assets.. 10.4% 11.0% 13.2% Return on equity.... 10.7% 11.5% 14.1% Profit margin ratio.. 3.6% 3.8% 4.0%