9/10 Class Flashcards
activity ratios are ratios with some measure of profit in the numerator and some measure of firm size or assets in the deonominator
false
four categories of accounting ratios
profitability - ratios with some measure of profit in the numerator
liquidity
leverage
activity
as the threat of substitutes increases, the average profitability in an industry automatically declines
false
unequivocal evidence of Bally’s weakening competitive position is which of the following
a restatement of earnings which show a $581 million charge
actions firms take to gain competitive advantages in a single market or industry are known as
business level strategies
ratios that focus on the level of a firm’s financial flexibility including its ability to get debt
leverage ratio
to a firm seeking competitive advantage an enrionmental threat is any individual gorup or organization tthat seeks to reudce the leve of performance
true
what is it?
cost of capital
drawback of using accounting measures of competitive advantage we discussed in class
short term bias, one year they could make an investment and it would look bad until the next year when it benefits
drawback of economic ratios
complex to calculate and you might not have all of the info you need
three tools of external analysis
industry structure
porters five forces model - memorize it on test
general environment
structure conduct performance model
originally developed to spot anti-competitive conditions for anti-trust purposes
rivalry
# of firms concentration relative size industry growth(demand) lack of product differentiation Economies of Scale
high differentiation
less competitive
less differentiation
more competitive
