1. why are ratios used to analyze the financial statements of organizations?

2. When common size ratios are prepare, each asset is compared to (...............) and every expenses compared to (.........)

How do common size ratios help compare organizations?

3. How do you evaluate a ratio for a specific year?

4. Why might too much liquidity be a problem for an organization? Why might too "Little" liquidity be a problem for an organization?

5. Discuss when and why different profitability ratios might be used?