For each of the following independent situations, suggest what ratio would provide appropriate information to answer the question.
a. You need to determine the number of days outstanding for accounts receivable.
b. You are considering investing in bonds of a publicly held company. You wish to analyze the possibility of the company failing to meet required interest payments.
c. You wish to measure and compare a firm's performance in using assets independent of the financing of the assets to the industry average.
d. You wish to assess a company's ability to meet immediate liabilities in an emergency.
e. You would like to determine how much capital is provided by common shareholders.
f. You wish to understand how long inventory remains on hand during the period.
g. You are considering how much additional long-term debt a company may be able to take on.
h. You are interested in how productive a company's fixed assets have been.

Question

For each of the following independent situations, suggest what ratio would provide appropriate information to answer the question.
 a.	You need to determine the number of days outstanding for accounts receivable.
b.	You are considering investing in bonds of a publicly held company. You wish to analyze the possibility of the company failing to meet required interest payments.
c.	You wish to measure and compare a firm's performance in using assets independent of the financing of the assets to the industry average.
d.	You wish to assess a company's ability to meet immediate liabilities in an emergency.
e.	You would like to determine how much capital is provided by common shareholders.
f.	You wish to understand how long inventory remains on hand during the period.
g.	You are considering how much additional long-term debt a company may be able to take on.
h.	You are interested in how productive a company's fixed assets have been.

Quizplus · Accepted Answer

The Answer of For each of the following independent situations, suggest what ratio would provide appropriate information to answer the question.
 a.	You need to determine the number of days outstanding for accounts receivable.
b.	You are considering investing in bonds of a publicly held company. You wish to analyze the possibility of the company failing to meet required interest payments.
c.	You wish to measure and compare a firm's performance in using assets independent of the financing of the assets to the industry average.
d.	You wish to assess a company's ability to meet immediate liabilities in an emergency.
e.	You would like to determine how much capital is provided by common shareholders.
f.	You wish to understand how long inventory remains on hand during the period.
g.	You are considering how much additional long-term debt a company may be able to take on.
h.	You are interested in how productive a company's fixed assets have been.

For Each of the Following Independent Situations, Suggest What Ratio