What comparisons do the calculations of financial ratios enable us to Essay

What comparisons do the calculations of financial ratios enable us to make Take two of these comparisons, and say why the process enables management to make better decisions - Essay Example It indicates that the liabilities have increased during the year or some assets have been sold. Similarly, current ratio can be used to make comparisons with similar business. For example, a steel manufacturer may have a current ratio of 2 while another has the current ratio of 1.5. Thus, current ratio of the former is higher but it may also be due to a lot of unused assets affecting its profitability. Gross Margin, which is a profitability ratio and is the ratio of gross profit to sales, makes a lot of sense for competitor analysis. Higher gross margins as compared to other companies in similar business lines indicate healthy position of the firm. Similarly a comparison with past periods is important. For manufacturing industries, the gross margins generally reduce over time and it is the volumes that drive the profitability (Analyzing your financial ratios). Price Earnings (P/E) Ratio is the most widely used investment ratio. An increased price earnings ratio as compared to past years may indicate positive outlook for the company but if the ratio increases above a certain limit say 20, it indicates overheating and chance of immediate correction in the stock price. A continuously decreasing P/E ratio may indicate bad stock fundamentals. Similarly, comparisons with similar companies can be used by an investor to take a rational investment decision (Drake, Pamela P). Inventory Turnover ratio is a widely used investment ratio. It is the ratio of Cost of Goods sold to average inventory and indicates the speed of replenishment of stock. An increased inventory turnover ratio over previous years implies better inventory management and faster sales. However, it could also be due to lower production due to some issues. Similarly, comparison with similar businesses can be used to analyze whether the company has been able to catch up with consumer demand for its products (How to Analyze Your

The Arkansas State Lottery Essay Example | Topics and Well Written Essays - 3000 words

The Arkansas State Lottery - Essay Example Based on a US 2003 Report, Arkansas ranked only 43rd in academic achievement among the 48 contiguous states in U.S. The National Education Association in 2002, meanwhile, rated Arkansan teachers' salaries at 41st place, pegged at no more than $36,962 per year. Additionally, the American Legislature Council bemoans that spending per pupil in the state is $5,764, roughly 25 percent lower than the national average of $7,557 per student (Muck). Local supporters of the lottery, hence, claim that returns drawn from the lottery would, by way of improving cash flows, facilities, technologies, and the overall serviceability of the institution, uplift the lagging educational system in the Arkansan state. Lottery money can also plug income and funding gaps critical to the overall maintenance and expansion of institutional development programs3. One such lottery supporter, Sandy Garrett, Oklahoma's state superintendent of public education, recounted that the expansion of the local scholarship program in Georgia was augured by its vigorous state lottery, and captured more fluently by its HOPE Program4. These scholarships had enabled several average or "B" students in high school land into top state-universities sans any significant financial burden (Muck). On a more On a more practical light, Rep. Shirley Walters-Greenwood of Arkansas explained that in-situ lotteries can generate savings. She mentioned that scores of people from Arkansas travel interstate to play lottery in presumably more palatable and less notorious gaming venues such as billiards halls, bingo sprees and casinos. Likewise, crossing states impose additional costs for gas and travel, and compel Arkansan