Please answer all of these questions in no more than one paragraph or you may use an outline form:
1. What three factors would influence your evaluation as to whether a company’s current ratio is good or bad?
2. What does the number of days’ sales uncollected indicate?
3. Why is a company’s capital structure, as measured by debt and equity ratios, important to financial statement analysis?
4. What ratios would you compute to evaluate management performance?
5. Suggest several reasons why a 2:1 current ratio might not be adequate for a particular company?