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A WORD OF CAUTION BEFORE WE BEGIN•While some financial ratios have established formulas, others are quite fluidand can be computed in many different ways. For this reason, if you look forthe formulas on the internet or in other textbooks, you may find slightlydifferent formulas and obtain different results.•For this course, we will use the Financial Ratios formulas outlined in thisPowerPoint and summarized in the Financial Ratios Summary Sheet postedon Moodle.•In some cases (e.g., Inventory Turnover), the denominator requires theaverage of two years. IF only one year worth of data is available, you maysimply use one year.•While there is a technical difference between Revenue and Net Sales, wewill treat them as the same thing for this course.
FINANCIAL STATEMENT USERSAND THEIR QUESTIONS•Customers want to buy from companies that will:–continue to produce goods or provide services in the future–provide repair or warranty service if required•Employees need to know if a company provides:–competitive salary and benefits–experiences that will prepare you to assume increased responsibility–