1.) What do those ratios tell you? (For example; do the increases or decreases suggest an improvement?)

2.) If any item of a ratio changes, how can the ratio become influenced?

3.) The calculation of all five groups of ratios.

4.) The application of DuPont equation

There are five major catergories if ratios and the questions they answer.

1.) Liquidity: Can we make required payments?

2.) Asset management: Right amount of assets vs. sales?

3.) Debt management: Right mix of debt and equity?

4.) Profitability: Do sales prices exceed unit costs, and are sales high enough as reflected in PM, ROE, and ROA?

5.) Market value: Do investors like what they see as reflected in P/E and M/B ratios?