Without referring to the text, indicate for each of the following ratios the formula for calculating it
Question:
Without referring to the text, indicate for each of the following ratios the formula for calculating it and the kinds of problems, if any, the firm may have if that ratio is too high relative to the industry average. What if the ratio is too low relative to the industry average? Create a table similar to the one that follows and fill in the empty blocks.
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Ratio Current ratio = Inventory turnover = Times interest earned = Gross profit margin = Return on total assets = Price/earnings (P/E) ratio = Too high Too low
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Ratio Formula Problems if Too High Problems if Too Low Current Ratio Current Ratio Current Assets Cu...View the full answer
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Related Book For
Principles Of Managerial Finance
ISBN: 9781292018201
14th Global Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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