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1.
What does inventory turnover measure?
How well a company manages its inventory. For example, if inventory turnover is too low, the company may be having problems selling its products.
2.
The amount of each dollar of sales that a company keeps in the form of gross profit is measured by _______.
Gross margin. It is calculated by dividing gross profit by sales.
3.
Financial ratios typically provide the most benefit when they are _______.
Compared with other identical ratios. Used comparatively, they can provide information about improvements or troubles at a company.
4.
Company Z has a current ratio of 1.5. This means that _______.
Its current assets should be able to satisfy its short-term obligations. Since current ratio is current assets divided by current liabilities, any ratio over one is a good sign.
5.
A company's leverage refers to how much _______ it has on its balance sheet.
