We can use ratios to help evaluate a firm's performance and financial position.

Question

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Ratios are commonly used to help evaluate a firm's financial performance and position. They can provide valuable insights into a company's liquidity, profitability, efficiency, and leverage. Investors and analysts often review ratios such as return on equity, debt-to-equity ratio, current ratio, and inventory turnover ratio when making investment decisions.

We Can Use Ratios to Help Evaluate a Firm's Performance