There are basically 5 categories of financial statement analysis that is employed to assess the health of companies related to their financial performance. They are generally classified as liquidity, efficiency, debt, profitability and market-based ratios.

Select 1 of the categories, and discuss the following:

• What does each ratio in the category attempt to measure?
• What individual ratios does it employ?
  • List at least 3.
• Discuss each of the ratios that you have identified.
  • How is each calculated?
  • What does each measure?
  • What is the general rule of thumb associated is ratio?
  • How do you know if a ratio is improving or deteriorating?
  • And what are some of the weaknesses or limitations of each ratio?