Identify the Financial Analysis Building Block Most Appropriately Associated with Each

question 149

Short Answer

Identify the financial analysis building block most appropriately associated with each ratio listed below by placing the letter of the building block a through d beside each ratio 1 through 10. Each building block may be used more than once.
A. Liquidity and Efficiency
B. Solvency
C. Profitability
D. Market Prospects
________ (1) Price Earnings Ratio
________ (2) Dividend Yield
(3) Accounts Receivable Turnover
(4) Days' Sales in Inventory
________ (5) Return on Total Assets
________ (6) Equity Ratio
________ (7) Debt Ratio
(8) Inventory Turnover
(9) Basic Earnings per Share
________ (10) Times Interest Earned

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Definitions:

Prompt Payment

The act of settling a financial obligation on or before its due date.

Sales Returns

Transactions involving the return of sold goods from the customer to the seller, often resulting in a refund or credit.

Credit Sales

Sales made by a business where payment is delayed as per agreed terms.

Inferior Merchandise

Goods that are of lower quality than the standard expected by consumers, often resulting in reduced customer satisfaction.