MI03 5/6 will upvote

Which of the following statements is correct? Financial statements are an analyst's microscope allowing them to get a better view of health of the industry and the economy than just looking at the raw-financial ratios. Current assets usually have a lower expected return than do fixed assets, so the shareholders would like to see that only the minimum amount of the company's capital is invested in current assets. Total Asset Turnover = Earnings Before Interest and Taxes / Total Assets. The average collection period, also known as day's sales outstanding, or - DO, tells us how many days, on average, it takes a firm to pay for its purchases of inputs or raw material on credit. All the answers are correct. Which of the following statements is incorrect? Efficiency ratios, also called asset management ratios, provide information about how well the company is using its assets to generate sales. With liquidity ratios, it is assumed that the current assets will be converted to cash which will then be used to retire current liabilities. All the answers are correct except one. Leverage financial ratios describe how well the firm is using its investment in various types of asses to produce sales. Financial ratios are useful to both internal and external analysts of the firm