1. Why are ratios used to analyze the financial statements of organizations?
2. When common size ratios are prepared, each asset is compared to _________ and each expense is compared to ___________. How do common size ratios help compare organizations?
3. How do you evaluate a ratio for a specific year?
4. Why might too much liquidity be a problem for an organization? Why might too little be a problem?
5. Discuss when and why different profitability ratios might be used.
6. Using Tables 14-1 and 14-2 (attached), calculate the current ratio, days cash on hand, days in accounts receivable, total asset turnover, interest coverage, long-term debt to net assets, total margin, and return on assets for 2013. Show your work.
This assignment must be completed no later than Thursday, August 28th by noon EST.