Discussion

1. Financial ratio analysis is conducted by four groups of analysts: managers,equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios?

2. Why would the inventory turnover ratio be more important when analyzing a grocery chain than an insurance company? Please use relevant examples to support your answer.

3. What does it mean when a company's return on assets (ROA) is equal to return on equity (ROE)? What implications does it carry?