1. What three factors would influence your evaluation as to whether a company’s current ratio is good or bad?

2. What does the number of days’ sales uncollected indicate?

3. Why is a company’s capital structure, as measured by debt and equity ratios, important to financial statement analysis?

4. What ratios would you compute to evaluate management performance?

5. Suggest several reasons why a 2:1 current ratio might not be adequate for a particular company?