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Ratios: Profit, Current, Debt to Equity

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What three ratios would you use to analyze a company and why would you select those three? Please explain, use examples, and give me references for further research.

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Solution Summary

This solution provides an overview of how and why someone should use profit margin, current, and debt to equity ratios to analyze a company that he or she is looking to invest in.

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Financial analyst tend to analyze a company for different reasons, however, if I were to look at it from an investor viewpoint, the three financial ratios I would use are 1) current ratio (current assets/current liabilities), 2) profit margin ratio (net income/sales or revenue), and 3) the debt to equity ratio. I would use ...

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  • Doctorate of Management in Organizational Leadership, University of Phoenix - Online
  • MBA, Webster Univeristy
  • Dual BS Degrees, University of South Carolina
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