1-If you were to get a physical from your doctor and he or she only took your blood pressure prior to stating that you are in good health, would you be concerned? If you have noticed in your readings, starting in Chapter 3, there has been explanation of the methods by which you could determine the financial health of a company. Name one and explain how it is computed. Which financial statement(s) does the input come from? Most importantly, what does it tell you about the financial performance or health?
2- Explain how ratio analysis can be used to evaluate the business ability to pay its debt. Which financial reports would you analyze?