How could an analyst determine whether a company's ratio is good or bad?
What will be an ideal response?
Two common benchmarks provide comparisons for determining whether a ratio is good or bad, relatively speaking.
They are:
1. Comparing a firm's ratios against its own ratios over time. This provides a means to determine what trends might
be present.
2. Comparing a firm against an industry average may provide a comparison of the firm's ratios against peer firms.
A firm's ratios may also be compared to targets or goals stated by the firm's management, such as "we expect to
increase or return on equity to 15% next year."
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When a marketing researcher compares two groups of respondents to determine whether or not there are statistically significant differences between them, the researcher is considering them as though two independent surveys were administered, one for each group.
Indicate whether the statement is true or false
Cox Merchandising Company began the year with merchandise inventory of $60,000, ended the year with merchandise inventory of $70,000, and had cost of goods sold of $110,000 . What was the Cox Merchandising Company's net purchases for the year?
a. $100,000 b. $110,000 c. $120,000 d. $130,000 e. none of the above
Martinez owns an asset that cost $87,000 with accumulated depreciation of $40,000. The company sells the equipment for cash of $42,000. At the time of sale, the company should record:
A. A loss on sale of $5,000. B. A loss on sale of $2,000. C. A gain on sale of $5,000. D. A loss on sale of $45,000. E. A gain on sale of $2,000.
Resumes and cover letters are mainly important for helping you:
a. get a job b. get an interview c. get reviewers to read your cover letter d. none of the above