MANAGEMENT

Detailed explanation-1: -Three ratios are used to measure financial solvency: the equity-to-asset ratio, the debt-to-asset ratio, and the debt-to-equity or leverage ratio.

Detailed explanation-2: -To accurately evaluate the financial health and long-term sustainability of a company, several financial metrics must be considered in tandem. The four main areas of financial health that should be examined are liquidity, solvency, profitability, and operating efficiency.

Detailed explanation-3: -Why Is Financial Performance Important? A company’s financial performance tells investors about its general well-being. It’s a snapshot of its economic health and the job its management is doing-providing insight into the future: whether its operations and profits are on track to grow and the outlook for its stock.

Detailed explanation-4: -The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company’s financial strength and provide a quick picture of a company’s financial health and underlying value.

Detailed explanation-5: -Answer and Explanation: The correct answer is option b) current ratio. The current ratio is a liquidity ratio that measures the company’s ability to pay its currently maturing obligations.