000 TB 0509 Why do analysts rely on financial statement rati

0.00 TB 05-09 Why do analysts rely on financial statement ratio Why do analysts rely on financial statement ratio analysis? O enables them to determine the role of the company\'s management. enables them to determine the future performance of the company stock. O It enabies them to determine the size of the company enables them to determine how well a company performed given the resources avalable to it. Mutiple Choice Difficulty Medium TB 05-09 Why do analysts rely on financlal Leaming Objectve 05-07 Calculate and Interpret the statement ratio t tor-Asseis. Asset Turnover: and Net Proft Margin

Solution

The ans is that \"It enables them to determine how well the company performed given the resources available to it.\"

Because the ratio analysis is mainly based on the financial statements those are based on the periods ended earlier. And then we measure the ratios based on figures reported thererin representing Resources as to assets and finance. The performance is measured as to the Profitability, Capital Structure, Liquidity, Solvancy, Efficiency.