One problem associated with ROE is that a. ROE does not consider risk. b. ROE does not consider profitability. C. ROE does consider the amount of capital invested. d. ROE does not consider both profitability and risk. Which of the following would, generally, indicate an improvement in a company's financial position, holding other things constant? a. Inventory turnover ratio decreases. b. Current ratio increases. c. Profit margin reduces d. Day sales outstanding increases . For a given level of profitability as measured by profit margin, the firm's return on equity will a. decrease as its times-interest-earned ratio decreases. b. increase as its debt-to-assets ratio increases. c. decrease as its current ratio increases. d. increase as its debt-to-assets ratio decreases. Consider the following scenario: You work for a brokerage firm. Your boss asked you to analyze Blue Parrot Manufacturing's performance for the past three years and to write a report that includes a benchmarking of the company's performance. Which of the following components would be best for you to include in your financial statement analysis? a Financial statements based solely on information given to analysts and brokerage firms b. A comparison of the firm's performance with other firms in the same industry based on their financial ratios When the current ratio of a firm declines, it is most likely to imply that a. the firm's ability to collect cash declines. b.the firm's profitable level declines. c. the firm's ability to pay off the short-term debt declines. d. the firm's ability to utilize asset declines. If a firm increases debt financing and reduces equity financing, typically a. its equity multiplier will decrease, and its ROE will increase. b.its equity multiplier will decrease, and its ROE will decrease. c. its equity multiplier will increase, and its ROE will decrease. d.its equity multiplier will increase, and its ROE will increase