Acc Dq's 2.3.

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What three ratios would you list as the most important? Why? A company uses percentage, a rate or a simple proportion. The three ratios are liquidity ratios, profitability ratios, and solvency ratios. Liquidity ratios measure short-term ability of a company to pay obligations ant to meet unexpected needs for cash. Profitability Ratios Measure the income or operating success of a company for a given period of time. Solvency ratios measure the ability of the company to survive over a long period of time. Ratios provide clues to underlying conditions that may not be apparent from individual financial statement. All of the ratios would be helpful to internal users because this would provide the company with the knowledge of if they would be approved for a loan that is needed or how much the company lost or gained as well as if the company looks as though it will be able to survive over a long period of time. Which ratios would external users be most interested in? Why? For external users I would say liquidity ratios and solvency ratios because both of these help with knowing if a company will be able to pay a loan back when called for. Which ratios would best help internal users manage the business? Why? For internal use I would say that Profitability ratios would be most helpful because it shows the amounts that the company has on hand. Beyond the basic financial statements what other information would you want to fully analyze a company’s performance? Why? I would say another reason to analyze a company’s performance would be if you wanted to invest or pull out, because if it is not worth it to the investor then they could invest somewhere else. I also think that it could be used to evaluate a company within its self to improve in areas that could be hindering the company’s ability to receive a loan. Why is it important to report discontinued

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