UGBA 102A Study Guide - Final Guide: Inventory Turnover, Net Income, Financial Statement
9 Sep 2019
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Chapter 13 homework: page 685 q 6,7; page 686 mc 4,5,8; page 688, 690 e13-1, e13-6. Q6: ratio analysis is a way to compute and show notable relationships between the content in financial statements. Ratios demonstrate comparative proportionalities and are calculated by dividing one amount by another, the base amount. Ratio analysis is useful in that it can shed light on valuable relationships which are not easily visible from absolute dollar amounts. Q7: a profitability ratio is a ratio that compares income with one or more primary activities. It focuses on net income and how much it compares to other amounts shown on the financial statement. An example of a profitability ratio is the return on equity ratio, which is calculated by dividing net income by average total stockholders" equity. E13-6: net profit margin, inventory turnover ration, average days to collect receivables b.
