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There are three categories of financial ratios: liquidity, solvency, and profitability. Using the SEC data for...

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Accounting

There are three categories of financial ratios: liquidity,solvency, and profitability. Using the SEC data for Macys, foundhere:

https://www.sec.gov/cgi-bin/viewer?action=view&cik=794367&accession_number=0000794367-18-000036&xbrl_type=v#

Describe what each category tells the user about the financialhealth of a company.

Choose three ratios in each category and describe what theratios tell the user about the company.

How are financial ratios used to evaluate a company?

Discuss what the numbers would be compared against foranalysis.

Calculate each ratio for your companies.

What do the ratios tell you about each of your companies?

Answer & Explanation Solved by verified expert
3.5 Ratings (355 Votes)
LIQUIDITY RATIOS These ratios indicate the companys ability to meet its short term obligations Higher the ratio better is the ability to meet short term obligations and higher is the probability that the creditors will be paid in time SOLVENCY RATIOS These ratios indicate the ability of the company to meet its short term as well as long term obligations Higher the ratio lower will be the risk of default on the part of the    See Answer
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Transcribed Image Text

There are three categories of financial ratios: liquidity,solvency, and profitability. Using the SEC data for Macys, foundhere:https://www.sec.gov/cgi-bin/viewer?action=view&cik=794367&accession_number=0000794367-18-000036&xbrl_type=v#Describe what each category tells the user about the financialhealth of a company.Choose three ratios in each category and describe what theratios tell the user about the company.How are financial ratios used to evaluate a company?Discuss what the numbers would be compared against foranalysis.Calculate each ratio for your companies.What do the ratios tell you about each of your companies?

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