Response to the following problem:
A team approach to learning financial statement analysis is often useful.
Required
1. Each team should write a description of horizontal and vertical analysis that all team members agree with and understand. Illustrate each description with an example.
2. Each member of the team is to select one of the following categories of ratio analysis. Explain what the ratios in that category measure. Choose one ratio from the category selected, present its formula, and explain what it measures.
a. Liquidity and efficiency c. Profitability
b. Solvency d. Market prospects
3. Each team member is to present his or her notes from part 2 to teammates. Team members are to confirm or correct other teammates' presentation.