Financial ratios are important to the understanding of the financial health of a company. You and your colleagues work for a financial services firm. You are discussing the merits of the various financial ratios.

Financial ratios are important to the understanding of the
financial health of a company. You and your colleagues work for a
financial services firm. You are discussing the merits of the
various financial ratios.

Identify four financial ratios, and state
what they tell you about a firm and why it is important to
understand what these ratios mean to both a bank and an investor.
Be sure to include your reasoning regarding these issues.

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Choose 4 different financial ratios from your text, course
materials, and/or Web resources.
Answer the following questions:

What do they tell you about a firm?
Why is it important for a bank to understand these financial
ratios?
Why is it important for an investor to understand these
financial ratios?

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