FINANCIAL RATIOS

Jovanny Mancera
Milena Espinosa
Andres Franco
Paola Marcela Feo

15.1       Find words in A opposite with the following meanings.

                1.            The ability to sell an asset for cash. = RTA: LIQUIDITY

                2.            How well a business uses its assets. = RTA: EFFICIENCY

                3.            The relationship between two figures .= RTA: FINANCIAL RATIOS

                               4.            How easily a business can pay bills or debts when they are due. = RTA: SOLVENCY

15.2       Make word combinations using a word from each box. One word can be used twice. Then use the word combinations to complete the sentences below. Look at B and C, opposite to help you.

• • Acid
  • Current
  • Dividend
  • Liquid
  • Quick

  Assets
• Cover
• Ratio
• Test

1.       CURRENT RATIOS consist of cash and things that can be casily sold and converted.

2.       A high DIVIDEND COVER shows that the company is retaining a lot of money belonging.

3.       The QUICK RATIO or ACID TEST doesn`t count stock or inventory because this might be difficult or impossible to turn into cash.

4.       The ACID TEST shows a company`s ability to pay its shorr-term debts.

15.3       Match the two parts of the sentences. Look ar B and C Opposite to help you.

                RESPUESTAS:        1 Y b

                                               2 y d

                                               3 y a

                                               4 y c

1.       If a company pays out retained surpluses from past years.(b)

2.       Some investors are worried that the new stock issue. (d)

3.       A high current ratio indicates short-term financial strength but. (a)

4.       Wall Street is on a historic price-earnings ratio of around 35, which. (c)

                                              

a)      It does not measure how efficiently the company is utilizing its resources.(3)

b)      Its dividend cover will fall below 1.0.(1)

c)       Makes the market very expensive, as the long-term average is 14.45.(4)

d)      Will dilute the company`s earnings per share. (2)