Financial ratios hold a different importance level for different people. Pick two people from the list below, and then identify a ratio that would be valuable to that person and one that would be less valuable. Give a rationale for each ratio.
- An quality assurance inspector at a mid-size manufacturer
- The president of the a clothing retailer
- The Chief Operating Officer at Microsoft
- An owner of a used car lot
- The comptroller of a regional airline
- An owner of a Bed and Breakfast
- A branch manager of a local bank
- A commercial real estate broker of multi-million dollar deals
Analyze the differences between liquidity, profitability, and solvency. If you only knew one of these sets of ratio classifications to determine an organization's health, explain which you would rely on and state why.