click below
click below
Normal Size Small Size show me how
Formula uses
who is interested in these formulas
| Question | Answer |
|---|---|
| What does Profit Margin measure? | Measures the ability to control costs & to charge respectable prices |
| Quick Ratio & Current Ratio - who is interested in these two? | Potential creditors, especially short-term lenders |
| Who is interested in Debt Utilization Ratios? | Potential long-term creditors |
| What do the Asset Utilization Ratios measure? | How efficiently assets are used to generate sales, how often temporary assets are turned over, show a relationship between the income statement & the balance sheet |
| What do the Profitability Ratios measure? | Measure the efficiency by relating income to investment base |
| What do the Liquidity Ratios measure? | Measure solvency - the ability of the company to meet its Liability commitments as they come due in the next year. |
| What do the Debt Utilization Ratios measure? | How the company is using debt to finance its operations |
| Who is interested in Asset Utilization Ratios? | Creditors, Shareholders & Prospective shareholders are interested in asset utilization ratios |
| Who is interested in Profitability Ratios? | Creditors, Shareholders & Prospective shareholders are interested in profitability ratios - Investors |
| Who is interested in Liquidity Ratios? | Short-term lendors |