Measuring Performance

Question 1

What are the 5 groups of ratios?

Answer 1

-Liquidity and solvency ratios
-Financial leverage ratios
-Turnover ratios
-Profitability Ratios
-Market Value Ratios

Question 2

What are the 5 group ratios in financial analysis?

Answer 2

-Market ratio (ratios indicate stock markets opinion of firm)

-Profitability ratios (how much profit made from sales/investments)

-Turnover ratios (how efficiently firm uses assets)

-Financial leverage ratios (exposure of firm to its long term debt obligations)

-Liquidity and solvency ratios (ability of firm to pay short term obligations)

Question 3

What is risk?

Answer 3

Something that disrupts or distorts our plans

Question 4

What are the two risks?

Answer 4

-upside risk (things turn out favourably than anticipated)

-downside risk (things turn out worse than planned)

Question 5

What is uncertainty?

Answer 5

Is a situation where you dont know what might go wrong

Question 6

What factors do we look for in making a decision?

Answer 6

Political
Economic
Social
Technological
Environmental
Legal