Question $7$

Financial ratios can be used in determining the financial and operating health of a

firm. which of these statements is accurate related to financial ratios.

Financial ratios cannot be used by comparing a firm's ratios to other firms in the industry,

to an average ratio in the industry or to prior year ratios of the firm.

US GDP is a financial ratio that is critical in determining a company and or industry

financial health

All of the answers are correct

None of the answers are correct

An example of a financial ratio that can help to determine the financial health of the firm is

employee satisfaction

Debt$/$Equity is a financial ratio that is commonly used to identify the health of a firm. If the

equity is greater than the debt it means that the firm should have the ability to borrow in

the future which provides flexibility for investment