 |  Accounting: What the Numbers Mean, 5/e David H. Marshall,
Millikin University
Wayne W. McManus,
International College of the Cayman Islands
Daniel F. Viele,
Webster University
Fundamental Interpretations Made from Financial Statement Data
Chapter 3 Learning ObjectivesAfter studying this chapter, you should understand:
1.Why financial statement ratios are important. |
| | | 2.The importance and calculation of return on investment. |
| | | 3.The DuPont model, an expansion of the basic return on investment. |
| | | 4.The significance and calculation of return on equity. |
| | | 5.The meaning of liquidity and why it is important. |
| | | 6.The significance and calculation of working capital, the current ratio, and the acid-test ratio. |
| | | 7.How trend analysis can be used most effectively. |
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2002 McGraw-Hill Higher Education