Radio Analysis and Focus Analysis

Question 1

_______ allow us to compare companies across industries, big and small, to identify their strengths and weaknesses

Answer 1

RATIOS

Question 2

_______ are mathematical comparisons of financial statement accounts or categories

Answer 2

FINANTIAL RATIOS

Question 3

______ use simple calculations based upon the interactions in sets of data

Answer 3

RATIOS

Question 4

Ratios are of limited use on their own, what are the following points that serve as a useful checklist if there is a need to analyze data and comment on it

Answer 4

1. WHAT DOES THE RATIO LITERALLY MEAN?
2. WHAT DOES A CHANGE IN THE RADIO MEAN?
3. WHAT IS THE NORM?
4. WHAT ARE THE LIMITATIONS OF THE RATIO?

Question 5

What are the three key areas does financial statements traditionally covers?

Answer 5

PROFITABILITY, LIQUIDITY, EFFICIENCY

Question 6

___________ compare income statement accounts and categories to show a company’s ability to generate profits from its operations

Answer 6

PROFITABILITY RATIOS

Question 7

Investors and creditors can use profitability ratios to judge a company’s return on Investment based on its ____________

Answer 7

RELATIVE LEVEL OF RESOURCES AND ASSETS