1.Identify what ratios a bank lender would be particularly interested in

2.. Financial analysis is more meaningful if the ratios can be compared to an appropriate benchmark such as: (choose one)

a. industry averages.

b. economic industry sector.

c. changes over time.

d. all of the options are appropriate benchmarks

3. The working capital ratio for Beesnees Business has progressively increased from 1.2 times to 3.0 over the past three years. Discuss if this trend is favourable.

4.Fit and Fantastic Ltd produces and sells a range of fitness equipment. Its capital expenditure for the current year of new plant was $300 000, and dividends paid were $40 000. Current liabilities and noncurrent liabilities were $56 000 and $700 000 respectively. Sales for the current year were $525 000, and net cash flow from operating activities was $88 000. Compute and interpret the debt coverage ratio.

5.Read the quote and discuss what you think the author means by passively calculating standard ratios.

Corporations have substantial incentives to exploit the fact that accounting principles are neither fixed for all time nor so precise as to be open to only a single interpretation. Analysts, who appreciate the magnitude of the economic stakes, as well as the latitude available under the accounting rules, will see clearly that a verdict derived by passively calculating standard ratios may prove dangerously naive.

Source: Fridson, M & Fernando, A 2002, Financial statement analysis: a practitioners guide, 3rd edn, John Wiley & Sons, New York