Business Administration 2257 Final: Bus2257 Financial Ratios & Desirable Trends Cheat Note

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*goal of the firm - earn satisfactory roi. *proof of management efficiency, yields insight for why net income is what it is too low = bankruptcy, poor credit rating (impairs future ability to obtain debt) exceeds debt interest rate = firm can benefit from. = net sales / ave. net fixed assets2. 3 asset turnover figures dependent on amortization, financing decisions (lease vs. buy), purchase date of assets. Percentage = more desirable on alternative investments (gov. Bonds) compare to risk and return shareholders" might make. Turnover = more desirable too high = lost sales if not enough inventory. Turnover = high cost of capital or foregoing better opportunities by having funds tied up. = total current assets / total current liabilities. = (cash + ms + a/r) / current liabilities. Ability to meet st obligations with st assets.