chp4 Q10

One of the most important applications of ratio analysis is to compare a company's performance with that of other players in the industry or to compare its own performance cver a period of time, Such analyses are referred to as a comparative analysis and trend anaysis, respectively. A common slee analysis requires the representation of finandal statement data relative to a single financial statement item (or base ccount or value), What is the most commonly used base iten for a common size balance sheet? Eamings before interest and taxes Net sales Net inconse Totaratiets Suppose vou afe conducting an analysts of the financial performance of Blue Hamster Manufacturing inc, over the past three years. The company did not issue new shares during these three years and has faced some operational difficulties. The company has thus pilot tested some new forecasting strategies for better operations management. You have collected the company's relevant financial data, made reasonable assumptions based on the information avalable, and calcolated the folfowing ratios. Bused on the proceding information, your calculations, and your assumstions, which of the following statements can be included in your analysis report? Check ail that apoly? A piautisle reasen why Blue Hamster Manutacturing finc.s price-to-cash-fow ratio has decreased is that investors expect lower cash fow per share in tho futuie. A decine in the dobtito-equity ratio ineses a decine in the credtworthiness of the firm. Ch 04: Assignment - Analysis of Financial Statements Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that apply. A plausible reason why elue Hamster Mandacturing incis price-to-cash-flow ratio has decreased is that imvestors expect lower cash flow per share in the future. A decine in the debe-to-equity ratio imples a decine in the creditworthiness of the firm. blue Hamster Manufacturino Incis ability to meet its debe obligations has improved since its debt-to-equity ratio decreased from 0.60 to 0.38. A decine in the inventory tumover ratio can be explained by the new inventory management system that the company recently adopted. which ied to mote officient iriventory manaoement