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Financial statement ratios

Financial statement ratios

On your own words,

1. If you could choose three financial statement ratios, in which to utilize and analyze a company for investment, lending, or employment purposes, which three financial statement ratios would you choose, and what information would these ratios provide?

2. Please compare and contrast two of the following inventory valuation methods:  first in-first out (FIFO), last in-first out (LIFO), or weighted average.  Please explain the benefits of each inventory valuation method you selected and how the inventory is valued.



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I would choose the solvency ratios, the liquidity ratios and efficiency ratios. Solvency ratios would provide information on the ability of a company to raise enough capital to pay its obligations. It would check if the company is able to raise enough money to pay all its debts.  Liquidity ratio include both the current ratio and the quick ratio. It looks at the ability of a company to convert its current assets into cash.It determines the…


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