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1) You are a financial manager for Shah Corporation. Financial analysts use ratio analysis (i.e., fundamental analysis) to understand the firm's financial health and make
1) You are a financial manager for Shah Corporation. Financial analysts use ratio analysis (i.e., fundamental analysis) to understand the firm's financial health and make stock investment decisions. However, the shareholders of Shah Corporation have requested you clarify financial leverage and liquidity ratios. Based on the given information, please answer the following a and b questions: a) Please list and explain two financial leverage ratios and three liquidity ratios to shareholders. (2 Points) b) Which financial leverage and liquidity ratios are essential for financial analysis? Which financial leverage and liquidity ratios are reliable for financial analysis and forecasting the future situation of the firm? Why? Why not? Please explain your reasoning by providing a quality argument. (2 Points)
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