List Four Specific Financial Ratios Used by Financial Managers and Explain

question 154

Essay

List four specific financial ratios used by financial managers and explain what each measures.

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Definitions:

Consumer Surplus

The difference in total spending willingness among consumers for a good or service versus their real outlay.

Binding Price Floor

A government-imposed price control or limit on how low a price can be charged that is above the equilibrium price, leading to surplus.

Consumer Surplus

The discrepancy in the total sum consumers are willing to offer for a good or service compared to what they actually offer.

Producer Surplus

The difference between the amount producers are willing and able to supply a good for and the amount they actually receive.