The Purpose of Using Financial Ratios Is to

question 73

Multiple Choice

The purpose of using financial ratios is to

• A) save space on your financial statements.
• B) share your financial figures with your advisors.
• C) help to analyze your raw data to compare how well you are doing.
• D) better understand how you are managing your financial resources.
• E) both C and D above

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Definitions:

Market

A venue or mechanism through which buyers and sellers interact to trade goods, services, or securities.

Business

An economic system where goods and services are exchanged for one another or for money, on the basis of their perceived value.

Factor Market

A factor market is a marketplace for the services of factors of production, such as labor, capital, and land, where these are bought and sold.

Circular Flow

An economic model depicting the continuous movement of money, goods and services, and factors of production between producers and consumers in the economy.