Key Financial Ratios.

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|KEY FINANCIAL RATIOS | |Ratio analysis is the study of relationships among and between various financial statement accounts. The following are extracted from| |chapter 6, "Fundamentals of Investing" by Gitman and Joehnk, 1993. This extract should be viewed along side the attached computations| |for EMC Corporation, a company that BAB's has interest in and therefore should make the study more interesting, if in deed looking at| |numbers can be interesting. | |Measures of Liquidity. Liquidity is the firm's ability to meet its day-to-day operating expenses and satisfy its sort-term | |obligations as they come due. A general overview of a company's liquidity position can often be obtained from two simple measures: | |current ratio and net working capital. | |  | |Current Ratio. The current ratio is one of the most commonly cited of all financial ratios. It is computed as follows: | |  | | | |current assets | | | |Current ratio = | |----------------- | | | | | |current liabilities | | | |  | | | |1,754,136 | | | | | |EMC = | |----------- | |= 4.20 | | | |...
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