Week 6 Discussion 303

Respond to the following:

Analysts use these ratios in three primary categories to analyze financial statements:

• Liquidity Ratios.
• Activity Ratios.
• Profitability Ratios.

Financial analysts tend to use one or two of these categories to analyze a company's financial position.

Imagine that you are a financial analyst:

• Select at least one ratio from each category.
• Describe what these ratios reveal about a company's financial health.
• Explain how you could use the ratio information to determine ways to improve a company's financial health.
• Explain which external user might be most interested in the ratio information and how they might use the information to make decisions