Financial ratios are important to the understanding of the financial health of a company. You and your colleagues work for a financial services firm. You are discussing the merits of the various financial ratios. Identify four financial ratios, and state what they tell you about a firm and why it is important to understand what these ratios mean to both a bank and an investor. Be sure to include your reasoning regarding these issues.
- Choose 4 different financial ratios from your text, course materials, and/or Web resources.
- Answer the following questions:
- What do they tell you about a firm?
- Why is it important for a bank to understand these financial ratios?
- Why is it important for an investor to understand these financial ratios?
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