In The Previous Discussion We Ve Looked At The Financial Statements And How Each
In the previous discussion, we’ve looked at the financial statements and how each is used to provide information useful to managers. Both managers and analysts use the information from all statements collectively to form an opinion of the company as a whole. One technique to assist in this endeavor is ratio analysis. However, many analysts disagree on the “correct” number of financial ratios to compute and review when determining whether or not to advise their clients to invest in a stock or not.
- Assuming you are an analyst, select a service or retail industry. For the industry selected, how many and which financial ratios do you feel should be computed and reviewed before advising a client to invest or not?
- In your opinion, what are the top three most important ratios for an analyst in any industry? Support your position with at least three reasons.
It is observed that in most of the situations, the external reporting rules are used for the measurementof the inventory and the cost of goods sold just for the simple reason that the goods are…
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