Background: Ratios are simple mathematical expressions, relationships
of one item to another. They are very useful tools that can express
accounting information used by management, current and potential
investors and creditors. Ratios assist understanding of financial
statements. Each ratio focuses on one aspect of the company; one
ratio alone is not enough.
Using terms such as Return on Investment (ROI), Return on Assets
(ROA), Return on Equity (ROE), Working Capital, Current Ratio, Quick
Ratio (Acid Test), Inventory Turnover, Accounts Receivable Turnover,
Price Earnings Ration (P/E)t oa answer the following quesiton:
Question: How would ratios differ in the following:
a. An e-business?
b. An IT business?
c. A healthcare business?
d. A global company |