For each ratio listed, identify whether the change in ratio value from 2007 to 2008 is usually regarded as favorable or unfavorable.

QS 13-7 Ratio interpretation P3 Ratio 2008 2007 Ratio 2008 2007 1. Profit margin 9% 8% 5. Accounts receivable turnover 5.5 6.7 2. Debt ratio 47% 42% 6. Basic earnings per share $1.25 $1.10 3. Gross margin 34% 46% 7. Inventory turnover 3.6 3.4 4. Acid-test ratio 1.00 1.15 8. Dividend yield 2% 1.2%

AppendixLO1