By the end of this chapter, you should be able to:
• Describe how traditional ratios can be used to identify managerial issues.
• Interpret ratios to determine appropriate managerial actions.
• Explain how corrective actions affect financial performance.
When we apply the tools of financial analysis described in Chapter 3 to financial statements and information of outside firms, we ask ourselves, “What did they do? What should they have done? What will the consequences of what they did be?” When we apply these same tools to the financial statements of our own company, the ...