FILL IN EVERY BLANK WITH WORD BANK, ONLY GIVING THUMBS UP IF ALL BLANKS ARE FILLED

FILL IN ALL BLANKS

2. Finandal ration are ured (1) by finandal managers to iefprove their stuck prions (2t by to evaluate that boeremen will be atte te per od dibts, (3) by to fowcint eamingts. , and stive prier 3. The current and quick ration bees helg us measere a firm's ligusidity. The 4. The wale is made. It can be cempured with the firm's contit terms to get an idea of whether cuscumen ane paying on time. 5. If is eigenificantly hecher than its indesery inctwase BOE and atwk price. 6. Financtal andyst iunstantly use five groupe of finaticul ration. Lequifity tation ake used to evaluate the finm's ability ta pay off A Awet managrewnt ratios ane uwed to ecamine bone efficiently the firm is using mots. Dabe mansgrancet rabios ane heavly used to Nvaluate the firm's ablity to puy eff Prutititialy tatim ate to indicate hom profitatly the firm is eperating by viluring its avsete Lastly, market value ration are to evaloute what invwotoes think abves the firm. quick ratie, lenders, dividende, days uales outvtanding, firm's fived assets twhover ratie, shart-tere debts, lang-term debts. etficient awet managrment, liguldity, curreat ratie Part I: Questions 16 (You might ase the words bank below). Each blank question is worth 5 points. 1. The peimary gioul of finandial managentent of a fitm is to mavimize its shock price in the short run. Improving BOEE (Return On Equity) is vosally translated into greater stock peice. The question is how to improve ROE. Mach research agroes that high ROE depends on (1) good liquidity, \{2\} , and (3) proper use od deter, 2. Finandal ratios ate used (1) by tinandal manakers to improve their stock prices (2) by to evaluste that borrowers will be able to pay off debts. (3) by to forecast earninges. and stock peice. 3. The current and quick ration both help us measure a firm's liquidity. The measures the relationehip of the firm's curent assets to its current liatulities, while the measures the firm's ability bo pay off short-berm coligaticens witheul felyittg on the sale of ittventoriss. 4. The tells us how long it taies, on average, bo colket after a sale is made. It can be compared with the tirm's crectit ferms to get an idea of whether customers are paying on time. 5. If ta sogrifieantly higher than its inulustry average, this cousd indicate that it uses its fived awets very efticiently, which is wsually incroase ROE and soock price. 6. Financial analywat constantly tue tive groups cof finathial tation. Liquaidity ration are used be evaluate the tirm's abrility to pay oft Aswet managecontit ratixs ane ured to examine honw eficiciently the firm is asing assets. Debt management ratios age heatily used to evaluate the Eirm's deility to pay oft Profitaledity ration ate to indicabe her profieably the finm is opetating by utitizing its assets. 1astly, market value ratios aee bo evaluate what investors thirk about the firm. quick ratio, Jenders, dividends, days sales outstanding. Eimm's fixed assets tarnoyer ratio, short-term debts, long-term debts, efficient asket managetwent, liquidity, curtent zatio