Describe How Computing Financial Ratios Can Help Users Get More

question 145

Essay

Describe how computing financial ratios can help users get more information from financial statements to determine the financial strengths of a business.

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Definitions:

Finished Goods

Goods that are fully manufactured and prepared for sale to consumers.

Cost of Goods Sold

The total direct costs attributable to the production of goods sold in a company.

Accounts Payable

The amount a company owes to suppliers or vendors for goods or services received that haven't yet been paid for.

Receiving Report

A document used to confirm the receipt of goods delivered, typically matched against the purchase order to ensure accuracy.