Why is Quick Ratio deemed a better measure than the two other measures? Explain:

Q: What is an acceptable current ratio?

A: Definition: Ratio analysis: It is the financial analysis tool for measuring the profitability,…

Q: Describe how the FIFO method is different from the weighted-average method.

A: FIFO and weighted average method are the accounting tool for the inventory valuation. Under FIFO,…

Q: What limitations do ratio analysis have?

A: Ratio Analysis: It is a technique used in the financial analysis field. Ratio analysis helps to use…

Q: Discuss any two limitations of  Ratio analysis.

A: Limitations of ratio analysis:Ratios are mostly computed based on historical costs as a result;…

Q: what are the three probability ratios equations?

A: Ratio Analysis - The ratio is the technique used by the prospective investor or an individual or…

Q: How the other ratios affects the ROE?

A: Return on equity is used to measure the company’s ability to utilize their assets to generate…

Q: What is one interpretation of a high P/E ratio?

A: Price to earnings ratio (P/E ratio) states the relationship of the earnings with price of that…

Q: What is the put-call ratio? What is it used for? What are considered high and low values and what do…

A: The question is based on the concept for indicators of the stock market performance. The Put-Call…

Q: Thanks, need help with the other ratios as well.

A: Ratio Analysis - The ratio is the technique used by the prospective investor or an individual or…

Q: Explain any  TWO (2) advantages of ratio analysis

A: Analyzing the figures that are recorded in the financial statement in such a manner that helps to…

Q: Discuss and explain the difference between

A: Parameters of Comparison Horizontal Analysis Vertical Analysis Definition It takes into…

Q: What are the Sharpe and Treynor rati pleces.) Sharpe ratio

A: The Sharpe and Treynor Ratios are both used to calculate the risk-adjusted return on an…

Q: “High correlation between two variables means that one is the cause and the other is the effect.” Do…

A: Correlation:Correlation is a way to ascertain the basic equation or bond between two given…

Q: What are the advantages and limitations of ratio analysis? Identify three advantage and three…

A: Ratio Analysis is the use of accounting ratios to forecast or review the financial performance of a…

Q: Which of the following statements are true? A. The lower the M-squared the better. B. The higher…

A: higher the sharpe ratio , the better the portfolio is. higher the treynor ratio, the better the…

Q: What is the Decreasing Returns to Scale? Can you please explain and give a definition, thank you.

A: The concept of decreasing return to scale is majorly used in production process and production…

Q: Under what conditions will the weighted average and FIFO methods give essentially the same results?

A: Under the FIFO (First in first out) method of inventory valuation, goods which are purchased first…

Q: The Peg Ratio appears to be a refinement that allows us to do what? Is the ratio aptly named?…

A: The price earnings ratio of the PE ratio is one of the most common measure to value the stocks of…

Q: What is broad averaging? Give three examples?

A:

Q: Discuss the advantages and limitations of Ratio Analysis.

A: Ratio analysis is the process of determining and interpreting numerical relationships based on…

Q: What is the difference between I and G spread measures?

A: The yield spread of the bond reflects the difference between the YTM(Yield to Maturity) of various…

Q: What types of variables are commonly used in a CRA Z-score model? Define the ratios and explain how…

A: CRA-Z model helps in finding the organisation's default and it eases to measure the control of the…

Q: What caused a decrease in the current ratio?

A: The current ratio is the ratio that is used to calculate the ability of the company to pay off its…

Q: List several potential problems with ratio analysis.

A: Ratio analysis is a correlation of details in an organization's financial reports. It is utilized to…

Q: Define the Sortino ratio and explain its advantage

A: Ratio analysis is referred to as the quantitative method for gaining an insight with relate to the…

Q: Is a negative Sharpe ratio good or bad?  EXPLAIN

A: What sharpe ratio measure? It measure the excess return earn by portfolio over risk free rate at…

Q: Explain the relationship between the conventionaL PW criterion and the B/C ratio?

A: The relationship between the cost of the project and benefits earned from the project is measured by…

Q: What is the relationship between the B/C ratio and the PW criterion?

A: The question is based on the concept of benefit to cost ratio analysis and present worth criteria…

Q: What are the differences and similarities between the Sharpe and Treynor measures?

A: Each asset or portfolio has a separate level of return and associated risk in response to the…

Q: List three types of users of ratio analysis. Would the different users emphasize thesame or…

A: Introduction: A ratio is a simple arithmetical expression of the relationship of one number to…

Q: What would the effect of the failure in the ratio measurement?

A: Ratio measurement in terms of financial world depicts that a single accounting figure by itself may…

Q: What is the reason P/E Ratio become lower and higher?

A: The Price Earnings Ratio or P/E Ratio defines the relationship between the stock price and earning…

Q: Why is ratio analysis so significant?

A: Ratio Analysis: This refers to the performance measurement of the business, in order to know the…

Q: What does the current ratio measure?

A: Ratios are the group of metrics which are used to measure the profitability as well as efficiency of…

Q: Describe the two basic differences between the weighted average and the FIFO method.

A: Inventory: Inventory refers to the stock of goods purchased, utilized and maintained by the company…

Q: Explain the limitations of ratio analysis

A: Limitations of ratio analysis:Ratios are mostly computed based on historical costs as a result;…

Q: What is meant by the current ratio?

A: The current ratio is liquidity which measures the ability of the enterprise to pay its short-term…

Q: When performing a benefit-cost analysis for multiple alternatives, calculate each B/C ratio, rank…

A: Introduction: Cost benefit analysis is generally performed by companies in order to know if the…

Q: The FIFO method provides a major advantage over the weighted-average method in that______?

A: The FIFO method provides measurements of work done during the current period .

Q: what is the quick ratio,

A: The quick ratio( also know as acid test ratio) is an state that a company’s short-term liquidity…

Q: Why is current ratio used?

A: Current ratio is the measure of liquidity position of the company. It shows the ability of the…

Q: What is the difference between the current ratio and the quick ratio?

A: Ratio analysis is a method of measuring the financial position of the organization with different…