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Check my wor For each ratio, select the building block of financial statement analysis to which it best relates.
| 1. | Equity ratio | |
| 2. | Return on total essets | |
| 3. | Dividend yield | |
| 4. | Book value per common share | |
| 5. | Days’ sales in inventory | |
| 6. | Accounts receivable turnover | |
| 7. | Debt-to-equity ratio | |
| 8. | Times interest earned | |
| 9. | Gross margin ratio | |
| 10. | Acid-test ratio |
♦ Relevant knowledge
Financial statements for a company contain information regarding the performance of the business’s finances during a specific accounting period. It is possible to analyze the information by using financial ratios, which are metrics that reveal the relation between two elements from the accounting statements. The ratios calculated are used by different stakeholders in order to make decisions. The most important kinds of financial ratios are: liquidity ratios, solvency ratios profitability ratios market value ratios and efficiency rates.
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