Sophia Principles of Finance Unit 1 Challenge 3

Sophia Principles of Finance Unit 1 Challenge 3 1 — Standardizing Financial Statements Select the correct order for the parts of an income statement. 1. Revenue 2. Expenses 3. Net income 2 — Overview of Ratio Analysis Ratios that measure how well a company controls expenses are __________. profitability ratios 3 — Profitability Ratios If total revenue is $400,000 and operating income is $250,000, then the operating margin is __________. 62.50% 4 — Asset Management Ratios Which of the following would explain a company’s inventory turnover ratio falling from 4 to 2.5? The company's cost of goods sold has decreased while the average inventory has remained constant. 5 — Liquidity Ratios What does it mean if a company has a current ratio of 3.25? The company's ability to pay off its short term debt exceeds what is generally considered adequate