Question

1. Comparative financial statements mean an investor or creditor can compare the financial information of one company side-by-side to the financial information of a major competitor for the same time period. true or false 2. To accurately determine the financial performance of a company, we should compare its performance (check all that apply) A. With the industry as a whole B. With a company in a different industry C. With a competing company D. Year-to-year 

          1. Comparative financial statements mean an investor or creditor can compare the financial information of one company side-by-side to the financial information of a major competitor for the same time period. 
true or false 
2. 
To accurately determine the financial performance of a company, we should compare its performance (check all that apply)
A.  With the industry as a whole
B.  With a company in a different industry
C.  With a competing company
D. Year-to-year
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Added by Kim B.

Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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1. Comparative financial statements mean an investor or creditor can compare the financial information of one company side-by-side to the financial information of a major competitor for the same time period. true or false 2. To accurately determine the financial performance of a company, we should compare its performance (check all that apply) A. With the industry as a whole B. With a company in a different industry C. With a competing company D. Year-to-year
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Transcript

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00:01 Hello students, here is a question.
00:02 The credit process and analysis fundamental financial ratio understanding how debts affects the company key financial ratios.
00:10 It is imperative for credit professionals from the perspective of a lender which of the following statement is not true about the borrower's financial ratio.
00:19 So this is our question.
00:20 We have four options given here.
00:22 Option a is higher debts to equity ratio is better than the lower debts to equity ratio.
00:55 And the second option is a higher debt service coverage ratio.
01:01 A higher debt service coverage ratio is better than a lower debt service ratio.
01:24 And option c is a higher fixed rate.
01:34 A higher fixed rate coverage ratio is better than a lower fixed charge coverage ratio.
01:57 And option d is a higher current ratio is better than the lower current ratio.
02:17 So these are the four options we have.
02:26 When it comes to an option a, a higher debts to equity ratio means that the company has more debts than equity which can be the sign of financial risk and therefore the statement is not true from the perspective of a lender...
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