Part 1 The Company and Its Environment Financial ratio analysis is conducted by managers, equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios? (3-2) (3-3) Over the past year, M. D. Ryngaert & Co. has realized an increase in its current ratio and a p in its total assets turnover ratio. However, the company's sales, quick ratio, and fixed assets turnover ratio have remained constant. What explains these chan Profit margins and turnover ratios vary from one industry to another. What differences would you expect to find between a grocery chain such as Safeway and a steel company? Think particularly about the turnover ratios, the profit margin, and the DuPont equation. ges? (3-4) How might (a) seasonal factors and (b) different growth rates distort a comparative ratio analysis? Give some examples. How might these problems be alleviated? (3-5) (3-6) Why is it sometimes misleading to compare a company's financial ratios with those of other firms that operate in the same industry? TEST PROBLEMS Solutions Shown in Appendix A