Question: Please answer all questions, that would be super helpful! 1. Describe whether you want a high value or a low value for each ratio, independent

Please answer all questions, that would be super helpful!

1. Describe whether you want a high value or a low value for each ratio, independent of the other ratios.

a. Return on equity: high value

b. Profit margin ratio: high value

c. Asset turnover ratio: high value

d. Financial leverage ratio: low value (typically between 0 and 1, higher than 1 is risky)

2. The profit margin ratio is the only ratio that makes up ROE that can be negative (except in relatively rare cases). Describe how the interpretation of the Asset Turnover Ratio and the Financial Leverage Ratio change based on whether the Profit Margin Ratio is positive or negative.

3. How can a company improve each ratio? Make sure to discuss how changes in either the numerator or denominator can improve the ratio. For each ratio, do you think it is better to focus on improving the numerator or denominator?

4. Before you analyze the data, it is helpful to develop an expectation of what you think you might see. What industry do you believe will have the highest and lowest values for the 2015 fiscal year for each item below? Why?

a. Return on equity

b. Profit margin ratio

c. Asset turnover ratio

d. Financial leverage ratio

5. What questions do you want to ask of the data? Think about relevant insights you want to gain for your stakeholder and identify at least five questions that you want to answer.

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