Finanical Statements
There are basically 5 categories of financial statement analysis that is employed to assess the health of companies related to their financial performance. They are generally classified as liquidity, efficiency, debt, profitability and market-based ratios.
Select debt and discuss the following:
• What does each ratio in the category attempt to measure?
• What individual ratios does it employ?
o List at least 3.
• Discuss each of the ratios that you have identified.
o How is each calculated?
o What does each measure?
o What is the general rule of thumb associated is ratio?
o How do you know if a ratio is improving or deteriorating?
o And what are some of the weaknesses or limitations of each ratio?