Chapter 3

Question 1

profitability ratios

Answer 1

measure on firms ability to earn return

Question 2

asset utilisation ratios

Answer 2

speed at which firm is turning over

Question 3

liquidity ratios

Answer 3

firms ability to pay off short term obligation

Question 4

debt utilization ratios

Answer 4

estimate the overall debt position of the firm

Question 5

investors like which ratios

Answer 5

1. profitability

2. liquidity and debt

Question 6

banker like which ratio

Answer 6

1. liquidity

Question 7

long-term creditors like which ratios

Answer 7

1. debt and profitability