Chapter 11
Financial Statement Analysis
542
AS-12 (
4
)
Suppose that Company A and Company B generate the same level of net income each period.
However, Company A is more capital-intensive than Company B. Which company will likely
have the higher return on assets?
AS-13 (
3
)
What is the formula for the current ratio?
AS-14 (
3
)
What does the current ratio tell you?
AS-15 (
3
)
If current assets stay constant from one period to the next, but current liabilities increase,
what will happen to the current ratio?
