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“The Balance Sheet, Ratio Analysis and the Financial Analyst”

Many financial ratios can be utilized to analyze financial statements. These fall into four (4) primary categories. Many financial analysts tend to utilize one (1) or two (2) of the following ratio categories when evaluating a company:

  • Liquidity Ratios
  • Activity Ratios
  • Profitability Ratios
  • Coverage Ratios

Imagine that you are a financial analyst. Discuss the ratios you would most likely focus on when you conduct your analyses. Provide a rationale for your selections.