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Questions and Answers
What is the purpose of financial ratio analysis?
What is the purpose of financial ratio analysis?
- To determine the market share of a company
- To analyze the customer satisfaction of a company
- To assess a company's financial performance and position (correct)
- To calculate the total revenue of a company
Which financial ratio measures a company's ability to meet short-term obligations?
Which financial ratio measures a company's ability to meet short-term obligations?
- Current ratio (correct)
- Asset turnover ratio
- Debt-to-equity ratio
- Return on investment ratio
What does a high debt-to-equity ratio indicate about a company?
What does a high debt-to-equity ratio indicate about a company?
- Stable financial position
- Low level of financial risk
- Strong ability to generate profits
- High level of financial leverage (correct)
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