Companies with a low total asset turnover ratio require a large amount of physical resources to generate each dollar of sales. This means they are…
How would an analyst take inflation into account in interpreting ratios? Inflation tends to increase income statement amounts year-by-year. New plant and equipment enters the…
Why are common size financial statements used for financial analysis instead of the actual statements themselves? Common size financial statements put all numbers in context,…
The demand for MBA graduates is always high in the corporate and government sectors. MBA graduates are responsible for maintaining efficient functioning of an organization….
Why might an analyst pay more attention to average balance values in looking at a seasonal or growing firm than when studying a firm that…
Is the fixed asset turnover ratio more relevant in the analysis of McDonald’s Corporation or General Motors Corporation? Why? The fixed asset turnover ratio is…
A well-known advertisement by American Express urged travelers returning home to keep their travelers checks rather than cash them in. The reason given was to…
Why do airlines often insist that you pay for your ticket on the date you book your flight rather than the date you actually fly?…
What determines investors’ required rate of return from a bond or stock? Investors’ required rate of return from a bond or stock (or any security)…
Distinguish between the value of a security and its price. Under what conditions would value equal price? The value of anything is what it is…