You have 3.
Does one rival have a better strategy than the others? Profits are earned over time, say during Seasonal factors can distort ratios.
Answer: Ratios facilitate comparison of 1 one company over time and 2 one company versus other companies. There are 5 essay questions worth 20 points each. Do these ratios indicate that investors are expected to have a high or low opinion of the company?
Goals that companies make are targets or results that managers hope to achieve. We often think of ratios as being useful 1 to managers to help run the business, 2 to bankers for credit analysis, and 3 to stockholders for stock valuation.
The times-interest- earned ratio is determined by dividing earnings before interest and taxes by the interest charges.