Question:
There are three broad categories of financial ratios: liquidity, solvency, and profitability. Discuss what each category reveals about the company being analyzed. Give examples of ratios that are affected by inventory, and discuss changes a manager might make to improve the financial ratio.
Financial Ratios
Financial ratios represent the relationship between two items or group of items present in financial statements numerically. There are 3 major categories of financial ratios given below.
a.Liquidity ratios
b.Solvency ratios
c.Profitability ratios
Answer and Explanation:1
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a. liquidity presents the business's ability to pay its current liabilities using its current assets, liquidity ratio helps in measuring the...
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