10. Analyzing ratios One of the mast important spplications of ratio analysis is to compare a company's performance with that of other players in the industry ar to compare its own performance over a period of time. Such analyses are referred to as a comparative analysis and trend analysis, respectivey. A common size analysits requires the representation of financist statemert data in terms of a single financial staternent zem for bace account or value). Whot is the most commonly used base item for a common size income statement? Stockhoiders' equity Net sales Total liablities Total assets Suppose you are conducting an analysis of the financial performance of Blue Hamster Manufacturing the, over the past three years. The compony did not issue new shares during these three years and has faced some operational difficulties, The company has thus piot tested same new forecasting stratepies for better aperations managenent. Ycu have collected the company's relevant financisl doto, made reasonable assumptions based on the information available, and calculated the foliowing ratios. Ch 04: Assignment - Analysis of Financial Statements based on the infermation wailable, and cakculated the to whiling ratios. atalog and Study Tools ental Options ollege success Tips areer success tips Bosed on the preceding information, your calculations, and your assumptions, which of the following statements can be induded in your analpuis repert? Check as that asply. The market value of llue Homster Manufocturing incis common shares decined over the three years: Bue hamster Manufscturing incis ablity to meet is dett obligations has worsened since its debte to ecuity ratio increased from o.so to 0.64, A plasible resson yhy the Hamster Mandacturing inc: frice-to-cash-fow ratio has increased is thst investors expect higher taen flow per share in the future. An inprovement in the inventory turnever ratio could likery be explained to the new wies. forecosting strateyes that lied to better inventory mansoement