(Answered) Financial statement analysis questions -1- why are ratios

Accounting

Financial Statement Analysis Questions -

1- Why are ratios and trends used in financial analysis?

2- What do the terms liquidity and solvency mean?

3- What is apparent from a horizontal presentation of financial statement information? A vertical presentation?

4- What is the significance of inventory turnover, and how is it calculated?

5- What is the difference between the current ratio and the quick ratio? What does each measure?

6- Why are the absolute amounts of limited use when comparing companies?

7- What is the difference between return on investment and return on equity?

8- Which ratios are used to measure long-term debt paying ability? How is each calculated?

9- What are some limitations of the earnings per share figure?

10- What is the formula for calculating return on investment (ROI)?

11- What is the information overload?

12- What is the price earnings ratio? Explain the difference between it and the dividend yield?

13- What environmental factors must be considered in analyzing companies?14- How do accounting principles effect financial statement analysis?

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