Question: Performance Objective:
(a) Identify two things that are useful to know about each of the following financial statements of a firm and explain how this knowledge is useful:
(1) balance sheet;
(2) income statement;
(3) cash flow statement.
(b) Identify two financial ratios that are useful in analyzing a balance sheet, income statement, or cash flow statement, and provide an example of how these ratios can be used by a firm's managers or other market analysts.
(c) Describe two potential problems in using financial ratio analysis in financial management.