Financial ratios

Question 1

How can a financial ratio increased?

Answer 1

1. Increasing the numerator
   2 Decreasing the denominator

Question 2

Using the financial ratio input how can you solve for the numerator?

Answer 2

Multiple the denominator * Financial ratio

Debt to equity ratio .75

Numerator = 750,000 (1,000,000 *.75)
Denominator = 1,000,000

Question 3

Using the financial ratio input how can you solve for the denominator?

Answer 3

Divide the numerator / Financial ratio

Debt to equity ratio .75

Numerator = 750,000
Denominator = 1,000,000 = (750,000 / .75)