Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

14. Financial Statement Analysis

Introduction to Ratios

Financial Accounting

14. Financial Statement Analysis

Introduction to Ratios

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Multiple Choice

Earnings per share, return on sales, and return on equity are all examples of which type of financial ratios?

Profitability ratios

Activity ratios

Liquidity ratios

Leverage ratios

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Verified step by step guidance

Understand the concept of financial ratios: Financial ratios are tools used to evaluate a company's financial performance and condition. They are categorized into different types based on the aspect of performance they measure.

Define profitability ratios: Profitability ratios measure a company's ability to generate profit relative to its revenue, assets, or equity. Examples include earnings per share (EPS), return on sales (ROS), and return on equity (ROE).

Define activity ratios: Activity ratios assess how efficiently a company uses its assets to generate revenue. Examples include inventory turnover and accounts receivable turnover.

Define liquidity ratios: Liquidity ratios evaluate a company's ability to meet short-term obligations. Examples include the current ratio and quick ratio.

Define leverage ratios: Leverage ratios measure the extent to which a company uses debt to finance its operations. Examples include the debt-to-equity ratio and interest coverage ratio.