Book Title:
Author(s):
Some examples from this set of practice questions
1.
What do you do when the question asks you to evaluate the performance of a particular entity?
Answer: • Consider ratios from all areas depending on the information supplied in the question. • Include specifically requested ratios based on the scenario. • Use the mark allocation as a guide to how many ratios are needed
2.
What do you when the question asks you to evaluate the non-financial performance of a particular entity?
Answer: Discuss four criteria: 1. Sustainability 2. Environmental 3. Social 4. Governance
3.
PROFITABILITY RATIOS
Answer: These ratios analyse: • the entity’s ability to generate income • to effectively control its expenses and • to generate an acceptable profit compared to the prior year, the industry, and its competitors.
4.
CAPITAL STRUCTURE AND SOLVENCY RATIOS
Answer: These ratios analyse: • the composition of an entity’s capital i.e. ordinary shares, interest-bearing debt, and hybrid capital. • An entity’s ability to meet its long-term expenses and expansion and growth.
5.
LIQUIDITY RATIOS
Answer: These ratios analyse: • The entity’s ability to pay its debts as and when they fall due.
6.
RETURN ON INVESTED CAPITAL RATIOS
Answer: These ratios analyse the entity’s ability to: • generate a return relative to an investment base (e.g., invested capital, equity or assets), and minimise non-essential payments.
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Stuvia is a marketplace, so you are not buying this document from us, but from seller ExpertTutor4. Stuvia facilitates payment to the seller.
No, you only buy these notes for $4.08. You're not tied to anything after your purchase.
4.6 stars on Google & Trustpilot (+1000 reviews)
83614 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now
