When reviewing the financial performance of a company, managers look at the income statement to measure the firm's ability to meet its current or short-term financial obligations.
The income statement allows the analysis of cumulative business performance over a period of time by showing sales, costs to produce sales, and other costs.
Businesses looking to improve the quality of a product or service may decide to monitor and measure their performance. Read the following scenario and answer the questions.
the income statement
leverage ratios
profitability ratios
liquidity ratios