Accounting ratios are only as good as the data on which they are based.’ Discuss. What does ‘ROCE’, EPS and P/E ratios and why are they important to a business entity. iii.        What is Capital gearing and how might it be calculated What is the possible link between the following ratios: (a) profitability and efficiency; (b) profitability and liquidity; (c) profitability and investment,and (d) efficiency and liquidity.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 34MCQ: Which of the following ratios is used to measure a firms profitability? a. Liabilities Ă· Equity c....
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  1. ‘Accounting ratios are only as good as the data on which they are based.’ Discuss.
  2. What does ‘ROCE’, EPS and P/E ratios and why are they important to a business entity.

iii.        What is Capital gearing and how might it be calculated

  1. What is the possible link between the following ratios: (a) profitability and efficiency; (b) profitability and liquidity; (c) profitability and investment,and (d) efficiency and liquidity.
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