How can inflation affect the comparability of financial ratios between firms? Explain your answer

Q: Explain the Limitations of Financial Ratios in Business Decisions?

A: Financial ratios are very useful in showing the relationship between the items within the financial…

Q: Is there an easily identifiable debt-equity ratio that will maximize the value of a firm? Why or why…

A: No, there is no such ratios.

Q: Which risk ratios best answer each of the following financial questions? a. How quickly is a company…

A: Risk Ratio: This ratio indicates the health of the company. Here health means that the capital…

Q: Is it financial expediency for firms to borrow?

A: The acquisition of debt funds by businesses is far more convenient than any form of funds and far…

Q: What is Ration Analysis in Financial Analysis?

A: Financial analysis is done for financial statements such as balance sheet for the period ended,…

Q: Why do analysts use financial ratios rather than the absolute numbers? Give an example

A: Financial ratio: It measures the accounting ratios of the organization during the accounting period…

Q: you are an investor how do you assess the financial ratios of the company? And why

A: FINANCIAL ratios are considered to be an important indicator for the companies financial stability…

Q: Financial ratios derived from accounts are unit free. How will you use financial ratios to analyze…

A: Financial ratio is used to compare  two or more financial data that is used to analyze the…

Q: What is capital rationing? What types of firms might encounter capital rationing?

A: A plan adopted by any organization to limit the several new projects or investments in any…

Q: api

A: How does asymmetric information affect corporate financial markets? In simple words, the asymmetric…

Q: Why would a company decide to pay investors cash? What are the two ways to give cash back to…

A: Cash is paid in terms of dividends.

Q: What are the importance of the following financial ratios? Price to earnings ratio. Earnings per…

A:

Q: What are the Limitations of Financial Ratios in Business Decisions?

A: Limitations of Financial Ratios in Business Decisions are as follows: Firms operating in various…

Q: Why is the quick ratio frequently a betterindicator than the current ratio of a firm’s ability to…

A: Current Ratio & Quick Ratio are short liquidity ratios. Both Ratios show efficiency of business…

Q: ___ indicate the ability of the firm to meet its short-term financial obligations.   a.…

A: Ratio measurement is in terms of Financial world, depicts that a sole accounting data by itself may…

Q: ul? Discuss and illustrate all your answer.

A: Ratio analysis measures the association among two or more financial variables. The analyst applies…

Q: Why is it important to analyze trends in various financial ratios as well as their absolute levels?

A: Accounting ratio:   It is a number expressed in terms of another to establish relationship among…

Q: b. Explain how do analysts use ratios to analyse a firm’s leverage?

A: Leverage: It is a term which refers to the usage of debt financing through borrowing funds to…

Q: Is there an easily identifiable debt-equity ratio that will maximize the value of a firm?

A: Theoretically, there exists a debt equity ratio at which the value of the firm gets maximized.…

Q: What is financial leverage? Explain the concept in relation to fina

A: Financial leverage: Financial leverage is the borrowing of debt to finance assets of the…

Q: How do you think financial ratios differ across different industries

A: Financial ratios are a way a whole company can be analysed based on its profitability , liquidity or…

Q: Explain how do analyst use ratios to analyse a firm's leverage? Which ratio convey more important…

A: Ratio analysis is used by the companies as a tool for evaluation of various aspect of operations…

Q: How might the different ages of firms distort comparisons of their fixed assets turnover ratios?

A: Fixed assets turnover ratio is a type of ratio analysis tool that is calculated by dividing the…

Q: what is the efficient market hypothesis. What does it say, if any, about individual financial…

A: Since you have asked multiple questions, we will solve the first question for you. Please ask…

Q: Financial markets: efficient and other.  How are financial firms able to make profits? Under what…

A: Introduction: Usually, financial institutions such as banks and insurance providers raise and pool…

Q: Distinguish between different levels of financial market efficiency. Give examples to illustrate…

A: The degree of reflection of all the information about an asset and the company issuing it in the…

Q: a) – Explain the concept of Tax Deduction in WACC. Does this tax deduction make debt finance Cheaper…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Explain how ratio analysis can be used to evaluate the business ability to pay its debt Which…

A: Ratio Analysis:   It is a technique by which the financial position of a company is analyzed. This…

Q: Which one of the following factors would likely cause a firm to increase its use of debt financing…

A: Debt financing refers to the issue of debt for raising funds in a company.

Q: What effect will disinflation following a highly inflationary period have on the reported income of…

A: Disinflation is the reduction or lowering of the pace of inflation. In other words, in situation of…

Q: why do firms use non financial measures

A:

Q: How a firm splits its income between retained earnings and dividends does not affects its rate of…

A: Income is the revenue earned by the company after the charge of all the associated expenses. A…

Q: Definition of size ratio and growth ratio for comparing between Banks

A: A ratio is an expression of comparison between two or more quantities denoted in fraction, ratio,…

Q: What are the issues involve in implementing the divident growth model approach and the security…

A: The dividend growth model is used to valuate a publicly held business that distributes its earnings…