Activity 10 TEST YOUR UNDERSTANDING A Review of Ratlo Annlysis ORACLE CORPORATION Ens the facal year ended Current ratio 5A129 1.79 SA100 1.74 SA1297 1.70 (P/L/S) (P/L/S 0.491 0.492 0.488 Debt ratio 0.11 (P/L/S) 0.15 0.14 Return on sales 0.18 0.14 0.18 (P/L/S) Return on assots Source: Diadorur, Inn, Compact DASEC, 2000. 1 In the left-hand remargin above, circle whether the ratio measures (P)rofitability, short-term (L) lquldiry- the abflity to pay ourent debt, or long-term (S)alvency - the ability to pay lang-tum debt For each short-term liquidity ratio abova, circle the ratio indicating the greatest ability to pay current llabilities for the three yean of Information presented 2. This company appears to have / not have the ability to pay current debt. 3. Far each long-term solvency ratio above, circlo the ratio indicating least amount of debt financing for the three years of information presented This company relies more heavily on (debt/equity) to finance assets. 4. For each profitability ratio above, circle the ratio Indicating the greatest profitability over the three years of information presented The profitability of this company appears to be strong / weak). 5. Refer to all of the ratio Information presented above. This company appears to be strong / weak). Eplain your answer. 6. The ratio that mosures the proportion of total assets financed with liabilities is (Return on sales / Return on assets / Current ratio/Debt ratio). The ratio that measures the proportion of net sales resulting in profits is (Return on sales / Return of assets / Curreat ratio / Debt ratio). 7. 8. The ratio that measure how effectively asta are used to generate profits is (Return on sales / Return on sets Current ratlo / Debt ratio). 9. A suppler ectanding credit to a company for 60 days would be most interested in examining the (Return on sules / Return on assets / Current ratio / Debt ratio)