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One of the most important applications of ratio anatysis is to compore a company's performance with that of other players in the industry or to

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One of the most important applications of ratio anatysis is to compore a company's performance with that of other players in the industry or to compare its own performance over a period of time. Such analvses are referred to as a comparative analysis and trend analysis, respectively. A common size analysis requires the representation of financial statement data in terms of a single financial statement item (or bsse account or value). What is the most commonly used base item for a common size income statement? Total liabihties Total assets Net sales Stockholders' equity Suppose you are conducting an anslysis of the financial performance of Cold Geose Metal Works the. ever the past three years. The company did not issue new shares during these three years and has faced some operational difficuities. The company has thus pilot tested some new forecasting strategies for better operations management. You have collected the company's reievant financial data, made reirsonable assumptions based on the information available, and calculated the following ratios. The company did not issue new shares during these three years and has faced some operational dieficulties. The company has thus pilot tested some new forecasting strategies for better operations manement. You have collected the company's relevant financial data, made reasonable assumptions based on the information available, and calculated the following ratios. Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check alf that apply. A plausible reason why Cold Goose Metal Works Inc's price-to-cash-flow ratio has decreased is that investors expect lower cash flow per share in the future, A decline in the debt-to-equity ratio implies a decline in the creditworthiness of the firm. A decline in the inventory tumover ratio can be explained by the new inventory management system that the company recently adopted, which led to more efficlent inventory management. A decline in the inventory turnover ratio could likely be explained by operational difficulties that the company faced, which led to duplicate orders placed to vendors

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