Interpretation of Changes in Ratios Consider each of the following as an independent case:

a. Increase in cash dividends

b. Decrease in interest coverage

c. Increase in return on sales

d. Increase in the P-E ratio

e. Reduction in accounts receivable turnover

f. Increase in current ratio Required 1. From the point of view of a manager of the company, indicate which of these items indicate good news and which indicate bad news. Explain your reasoning for each. 2. Would any of these items be viewed differently by an investor than by a manager? If so, which ones? Why? Problems