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Dividing users of ratios into short term lenders long term lenders and stockholders which ratios would each group be most interest in and for what reasons?
1 because short-termlenders liquidityconcern is with the firm'sability to pay short-termobligations as they come due.2 becauseLong-termlenders--leverageratiosare concerned with the relationship of debt to total assets.Long-termlenders--leverageratios will examine profitability to insure that interest payments can be made.3.becauseStockholders--profitabilityratios, with secondary consideration given to debt utilization, liquidity, and other ratios. Since stockholders are the ultimate owners of the firm, they are primarily concerned with profits or the return on their investment.
Types of ratios?
1 - Actiivty raios 2 - turnover ratios 3 - Profitability ratios 4 - Liquidity Ratios
What are the benefits in using ratios for accounting?
what are the beniftes in using ratios in accounting
Which group of ratios might be most interesting to potential creditors of a firm?
leverage ratios
What are the ratios of these components?
386
What ratios are stockholders interested in?
# The current ratio # return on equity # dividend rate # Gross Margin # Net income margin # qurterly and annual growth ratios
Dividing users of ratios into short term lenders long term lenders and stockholders which ratios would each group be most interest in and for what reasons?
1 because short-termlenders liquidityconcern is with the firm'sability to pay short-termobligations as they come due.2 becauseLong-termlenders--leverageratiosare concerned with the relationship of debt to total assets.Long-termlenders--leverageratios will examine profitability to insure that interest payments can be made.3.becauseStockholders--profitabilityratios, with secondary consideration given to debt utilization, liquidity, and other ratios. Since stockholders are the ultimate owners of the firm, they are primarily concerned with profits or the return on their investment.
Who would interested in the profitability ratios of a business?
Investors and shareholders are primarily interested in the profitability ratios of a business, as these metrics help assess the company's financial health and potential for returns on their investments. Additionally, creditors and lenders analyze these ratios to evaluate the business's ability to generate sufficient profits to meet debt obligations. Management may also use profitability ratios to make informed strategic decisions and improve operational efficiency.
What ratios are long-term lenders interested in?
Long-term lenders are primarily interested in ratios that assess a borrower's ability to repay debt over time. Key ratios include the debt-to-equity ratio, which indicates the proportion of debt relative to shareholders' equity, and the interest coverage ratio, which measures the ability to meet interest payments with earnings before interest and taxes (EBIT). Additionally, the current ratio and quick ratio provide insights into short-term liquidity, while the debt service coverage ratio evaluates the cash flow available to cover debt obligations. These ratios help lenders assess the overall financial health and risk associated with lending to a borrower.
What is the definitions of scaling and ratios?
Scaling- when you multiply or divide equivalent fractions
How do you simplify Ratios?
Find the biggest common factor and divide it by both numbers
How can you simlify ratios?
Divide the numerator and denominator of the ratio by their highest common factor.
How do you express ratios in simplest form?
if you have 3 out of 9 you have to divide first by the GCF which is 3 and after you divide you will get 1 out of 3 and that's your answer!
How do you combine ratios?
The answer will depend on how exactly you wish to combine them: add/subtract, or multiply/divide.
How do you do ratios in simplest form?
same as a fraction, divide them both by the gcf(Greatest common factor)
How do you reduce ratios?
Same as fractions. Check if there is a common factor, then divide both numbers by the common factor.
What ratios do you think banks are most interested in for young company?
Banks are typically most interested in liquidity ratios, such as the current ratio and quick ratio, to assess a young company's ability to meet short-term obligations. They also focus on leverage ratios, like the debt-to-equity ratio, to evaluate financial stability and risk. Additionally, profitability ratios, such as net profit margin, can provide insights into the company's potential for sustainable growth. Overall, these ratios help banks gauge the financial health and viability of startups seeking funding.
