If you were a user of financial statements, what type of ratio/analysis do you think would be most important to use to make sure the company you have invested in is doing well? What would you look for in a company that you were considering investing in?
Added by Nicole K.
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This ratio measures the company's ability to generate profits from its operations. It includes ratios such as gross profit margin, net profit margin, and return on equity. By analyzing these ratios, an investor can determine if the company is generating enough Show more…
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The four key users of financial statements are owners/managers, lenders, investors, and governments. These users rely on financial statements to evaluate a company's past financial performance as indicators in areas of profitability, liquidity, leverage, and efficiency; to create benchmarking matrices; and to support future decision-making. Choose two companies in the same industry whose financial statements are available online. Complete several financial ratios for each company and compare them. Share your analysis and answer the following questions: What did your analysis tell you about these companies? What sorts of decisions would this analysis help you make, such as buying stocks, considering accepting an employment offer, etc.?
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