Question
Your friend prepares an annual report and has calculated several financial ratios in this regard. Unfortunately, he has difficulties interpreting some ratios. In this context,
Your friend prepares an annual report and has calculated several financial ratios in this regard. Unfortunately, he has difficulties interpreting some ratios. In this context, he asks for your help in identifying the economic reasons for the following trends (explain each example in a few sentences): a. days in inventories has increased considerably b. Net profit margin has steadily decreased but ROIC has remained stable c. Company's net working capital has increased from 1 million to 2 millions eur d. The company's share P / E ratio is significantly lower than for its main competitors
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