CHAPTER 8 QUIZ 11 TO 15

CHAPTER 8  QUIZ 11 TO  15

11. Debt utilization ratios do not consider current liabilities

12. Firms with P/E ratios higher than the overall market ratio are expected to provide greater than normal returns with equal or less risk.


13. Ratio analysis for large firms may be facilitated by dividing the company along industry, market, or geographic lines

14. Industry trend analysis provides a method of comparing industry performance throughout the economy and of identifying the potential winning and losing companies within an industry.

15. Listing all balance sheet items at historical cost helps to reduce the distortion in profits caused by inflation.

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