Why Would It Be a Good Idea to Plot Time-Series

question 131

Essay

Why would it be a good idea to plot time-series data on a ratio scale instead of a regular scale? What is the difference between the two types of graphs?

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Definitions:

Quick Ratio

A liquidity indicator that measures a company's ability to cover its short-term obligations with its most liquid assets, excluding inventories.

Accounts Receivable

Accounts Receivable refers to the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Short-term liabilities of a company for goods and services received from others but not yet paid for.

Du Pont Identity

A framework for analyzing a company's return on equity (ROE) by breaking it into three key components: profit margin, asset turnover, and financial leverage.