Applying Ratios to a Business
Review the following Evaluating Business Performance: Small Business Case Studies video:
The video focuses on profitability, liquidity, efficiency, and stability of business. Given what you have learned about ratio analysis, choose one of the businesses from the video (Rose Chong Costumes, Anro’s Floor Maintenance, or John Osborne’s Gym and Squash Center) and identify two ratios that would be helpful for the owner of the business to monitor. Be sure to explain what the ratio would tell the owner, and how it can be improved for the business.
Guided Response: Review several of your classmates’ posts. Respond to at least two classmates who have chosen a different business owner and explain whether you would have identified the same ratios as your classmate. What other ratios may be helpful? Do you agree or disagree with their use of the ratio? Explain.