Which of the following is NOT a reason for managers to use financial ratios for internal purposes?

judge a supplier's financial status

compare divisions

determine incentive pay

establish the firm's credit worthiness

A ratio that is ________, relative to our peers, might indicate that our inventory levels are too ________ and we are missing sales.

low, high

parallel, low

uniform, high

high, low

By using utilization ratios, financial managers may conclude that the firm is efficient and needs additional investment in ________ to generate additional sales.

equipment

upper management

manpower

operations

Managers may use asset utilizationratios as a basis to adjust inventory levels or ________.

revise warehouse policies

maintain income levels

vary production schedules

alter credit policies

The price-to-earnings ratio (or P/E ratio) is a market value ratio that provides managers with information about how investors ________ the firm. The P/E ratio is calculated by taking the current stock price and dividing it by the most recent earning per share.

perceive

approve

empower

sanction

Some businesses are seasonal and transition at different times of the year. A firm's balance sheet is a snapshot created at a point in time. Therefore, ________ that use balance sheet data may not truly reflect the firm's financial condition during much of the year.

standards

principals

ratios

formulas