Explain the major financial ratios and financial cycles, debtratio, debt to equity ratio, return...

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Accounting

Explain the major financial ratios and financial cycles, debtratio, debt to equity ratio, return on assets, return on equity,current ratio, quick ratio, inventory turnover, days in inventory,accounts receivable turnover, accounts receivable cycle in days,accounts payable turnover, accounts payable cycle in days, earningsper share (EPS), price to earnings ratio (P/E), and cash conversioncycle (CCC) and state the significance of each for financialmanagement. Include examples based on a hypothetical balance sheetand income statement.
Can CCC be negative? If so, what does it indicate?
Explain working capital and its significance. Evaluate workingcapital in your example given in part “a” of this DQ2

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FINANCIAL RATIOS FINANCIAL CYCLES Financial ratios are the ratios that are used to analyze the financial statements of the company to evaluate performance where these ratios are applied according to the results requiredFinancial ratios offer entrepreneurs a way to evaluate their companys performance and compare it other similar businesses in their industry Ratios measure the relationship between two or more components of financial statementsRatios are calculated by dividing one number by another total sales divided by number of employees for example Ratios enable business owners to examine the relationships between items and measure that relationship They are simple to calculate easy to use and provide business owners with insight into what is happening within their business insights that are not always apparent upon review of the financial statements alone Ratios are aids to judgment and cannot take the place of experience They are used most effectively when results over several periods are compared The broad categories of ratios which are liquidity ratios leverage financial ratios efficiency ratioprofitability or return on investment ratiomarket value ratiosetc Financing cycle is the counterpart to the Investment cycle and Business cycle It covers the period from raising Financial resources to their repaymentfinancial cycles map out the rises and falls in economic activity Through mapping and analysis businesses can better recognise symptoms of growth and recession as well as determine the See Answer

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In: AccountingExplain the major financial ratios and financial cycles, debtratio, debt to equity ratio, return on...Explain the major financial ratios and financial cycles, debtratio, debt to equity ratio, return on assets, return on equity,current ratio, quick ratio, inventory turnover, days in inventory,accounts receivable turnover, accounts receivable cycle in days,accounts payable turnover, accounts payable cycle in days, earningsper share (EPS), price to earnings ratio (P/E), and cash conversioncycle (CCC) and state the significance of each for financialmanagement. Include examples based on a hypothetical balance sheetand income statement.Can CCC be negative? If so, what does it indicate?Explain working capital and its significance. Evaluate workingcapital in your example given in part “a” of this DQ2