Question

ch 14 How do financial ratios drive the comparison between industries, times and competitors?

ch 14 How do financial ratios drive the comparison between industries, times and competitors?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Financial ratios are derived on the basis of figures given in the balance sheet. A company usually evaluates its performance by comparing its ratios with the ratios of the industry and its competitors.

For Eg: The Net profit ratio of a company is 20% whereas that of its competitor is 25%.This means that the competitors are earning better profit than the company either due to their cost efficiency or reduced other expenses or better utilization of resources.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. How do you think financial ratios differ across different industries? Compare two industries of your...
1. How do you think financial ratios differ across different industries? Compare two industries of your choice and select a few ratios and explain whether you think the ratios would be higher or lower for each of those industries and explain why. 2. What are some uses and limitations of financial ratios?
How does the use of Common Size Financial Statements allow for easy comparison and how do...
How does the use of Common Size Financial Statements allow for easy comparison and how do they relate to vertical analysis of financial statements?
Why is preparing a financial plan so important? How do financial ratios fit into the preparation...
Why is preparing a financial plan so important? How do financial ratios fit into the preparation of a financial plan?
Explain the concept of a firm’s cash conversion cycle. How do financial statement ratios provide insight...
Explain the concept of a firm’s cash conversion cycle. How do financial statement ratios provide insight into a firm’s cash conversion cycle? [
What kind of business risk do businesses in the defense industries face? How do they manage...
What kind of business risk do businesses in the defense industries face? How do they manage financial risk?
What insights do these ratios provide about R&E’s financial performance? What problems, if any, does the...
What insights do these ratios provide about R&E’s financial performance? What problems, if any, does the company appear to have? Profitability ratios: 2008 2009 2010 2011 Return on equity (%) 17.1% 17.3% 15.7% 11.7% Return on assets (%) - 11.3% 10.3% 7.7% 5.0% Return on invested capital (%) - 18.7% 18.9% 17.4% 12.9% Profit margin (%) - 3.3% 2.9% 2.4% 1.4% Gross margin (%) - 16.0% 15.0% 15.0% 14.0% Turnover-control ratios: Asset turnover (X) - 3.4 3.6 3.2 3.5 Inventory...
a) How is the Gucci priced compared to other competitors? b) Do price tiers exist, which...
a) How is the Gucci priced compared to other competitors? b) Do price tiers exist, which tiers are covered by Gucci in the category? For example, do you see the same brand offering premium and budget priced options? Do you see the same number of brands competing in each tier? c) Brand of Gucci, What is the relationship between market share and price tier? Do industry reports suggest one price tier captures the majority of sales for the category? If...
A comparison is made between two bus lines to determine if arrival times of their regular...
A comparison is made between two bus lines to determine if arrival times of their regular buses from Denver to Durango are off schedule by the same amount of time. For 46 randomly selected runs, bus line A was observed to be off schedule an average time of 53 minutes, with standard deviation 15 minutes. For 60 randomly selected runs, bus line B was observed to be off schedule an average of 62 minutes, with standard deviation 13 minutes. Do...
Kendra Massey is trying to decide how to invest a recent windfall inheritance. Because she considers...
Kendra Massey is trying to decide how to invest a recent windfall inheritance. Because she considers herself a fashionista, her first thought was to look at two of her favorite stores, Nordstrom and Macy's. Kendra visited each company's website and calculated the following ratios based on the financial statements she found there. She also found some industry averages to use as a comparison. Macy's Nordstrom Industry Average 2015 2014 2015 2014 2015 2014 Current ratio 1.34 1.69 1.04 1.87 1.90...
How do i solve this with a BA II Plus financial calculator? A project that provides...
How do i solve this with a BA II Plus financial calculator? A project that provides annual cash flows of $1,000 for eight years costs $4,900 today. Is this a good project if the required return is 8%? What if it’s 24%? At what discount rate would you be indifferent between accepting the project and rejecting it?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT