Discuss why an investment analyst would use financial ratio analysis to decide the investment-worthy of a company? Give at least five reasons why.
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Discuss why an investment analyst would use financial ratio analysis to decide the investment-worthy of a company? Give at least five reasons why.
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- Describe and justify why you would use the following ratios as an analyst to evaluate the performance of a company. Profitability Ratios Liquidity Ratios Gearing Ratios Investment RatiosYou want to evaluate the stock of a company. Answer the following questions to guide your analysis analysis and explain what data you rely on and what you do with it? Why are the net assets of the company important? What other indicator does an investor look at when selecting investments?Which financial ratios would you recommend to evaluate a company's solvency? Once these ratios are computed, what do you recommend comparing them to?
- Please include relevant parts and be thorough with explanation. If you were a user of financial statements, what type of ratio/analysis do you think would be most important to use to make sure the company you have invested in is doing well? What would you look for in a company that you were considering investing in?Financial ratio analysis is conducted by managers, equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios?Based on the historical company financial information and business description is given below answer the following: (a) Identify three key ratios you would use as a guide (and why) to help you determine which business you would prefer to invest in?(b) What further information might you consider or need before making a final investment decision?
- An analyst who is interested in assessing a company’s fi nancial position is most likely to focus on which fi nancial statement? B . Income statement.To evaluate a company’s performance, investors need a benchmark to which they can compare its financial ratios. What are some of the problems associated with these comparisons?Discuss the major methods of a company valuation. In doing so, explain each method and compare their advantages and disadvantages with the other methods you choose to discuss Discuss the above based on the following: Explain the market capitalization. Explain the book value. Explain (expected) future earnings. Provide a narrative on other methods (minimum of two). Compare market capitalization, book value, and future earnings methods (and your other chosen methods) with each other to include their advantages and disadvantages.
- An analyst who is interested in assessing a company’s fi nancial position is most likely to focus on which fi nancial statement? A . Balance sheet.. Explain the factors used in the formula, how the ratio assists the investor in evaluating a company’s performance, and whether it assesses liquidity, solvency, or profitability.Ratio analysis involves calculations that use the data from the financial statements to evaluate the performance of companies in different key areas. How would this information be used by a credit analyst as compared to someone is going to make an investment decision?