Consider the following scenario: Your boss asked you to analyze Green Hamster Ma
ID: 2602234 • Letter: C
Question
Consider the following scenario: Your boss asked you to analyze Green Hamster Manufacturing's performance for the past three years and prepare a report that includes a benchmarking of the company's performance. Using the company's last three years of financial reports, you've calculated its financial ratios, including the ratios of Green Hamster Manufacturing's competition-that is, comparable ratios of other participants in the industry-and submitted the report. Along with calculating the ratios, what else is needed for your report? O Making observations and identifying trends that are suggested by the ratio analysis O Identifying the factors that drive the trends in the ratios Both of the above There are several groups of ratios most decision makers and analysts use to examine different aspects of a company's performance. Based on the descriptions of ratios listed, identify the relevant category of ratios. Ratios that help determine whether a company can access its cash and pay its debts that mature in less than a year are called ratios. These ratios, which help determine how efficiently a firm is using its assets to generate sales are called ratios. Ratios that help assess a company's ability to service the interest and repayment obligations on its long-term debt and the degree to which it uses borrowed versus invested financial capital are called ratios. ratios help measure a company's ability to generate income and profits based on its invested capital. ratios examine the market value of a company's share price, its profits and cash dividends, and the book value of the firm's assets and relate them to other data items to determine how the firm is perceived in the stock market.Explanation / Answer
1. Both of the above
- Liquidity ratios help determine whether a company can access cash and pay its debts that mature in less than a year.
- Asset Management Ratio help determine how efficiently a firm is using its assets to generate sales.
- Debt management Ratio help measure a company's ability to pay off its long-term obligations and finance its assets.
- Profitability Ratio help measure a company's ability to generate income based on the capital invested.
- Market-Value Ratio relate the observable value of a company in the stock market to the company's book value.
Inventory is considered the least liquid asset among the three.
In case of multipart qtns an expert can do only 4 initial subparts. Thanks