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Unformatted text preview: 15) Know why ratio analysis is useful. 16) What do the short term solvency ratios tell us? 17) Why do we subtract inventory when we calculate the acid-test ratio? 18) What does the long term solvency ratios tell us? 19) What are the asset management ratios used for? 20) What information can we learn by looking a companies Profitability ratios? 21) What is the difference between Market values and Book values? 22) What does it mean if a PE ratio is high? What does it mean if it’s very low? 23) What does the market-to-book ratio tell us? 24) Know how to decompose return on equity into its three components using the DuPont Identity and be able to use this to pinpoint trouble areas. 25) Know why benchmarking is important and what is typically used as a benchmark. 26) Be able to use algebra to solve for the missing variable....
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- Spring '12
- Balance Sheet, average tax rates, term solvency ratios