Please answer each of the following questions in detail and provide in-text citations in support of your argument. Include examples whenever applicable.
- Explain the major financial ratios and financial cycles, debt ratio, debt to equity ratio, return on assets, return on equity, current ratio, quick ratio, inventory turnover, in inventory, accounts receivable turnover, accounts receivable cycle in , accounts payable turnover, accounts payable cycle in , earnings per share (EPS), price to earnings ratio (P/E), and cash conversion cycle (CCC) and state the significance of each for financial management. Include examples based on a hypothetical balance sheet and income statement.
- Can CCC be negative? If so, what does it indicate?
Explain working capital and its significance. Evaluate working capital in your example given in part “a” of this DQ 1.