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Accounting Ratios

A

andy orodo

Member
The core reading provides a list of quantitative analysis accounting ratios to be used when valuing an investment opportunity.

Why only this list? Surely the other accounting ratios are just as valid as they will also provide a quantitative analysis of the features of the investment i.e.
- profitability ratios
- debt ratios
- liquidity ratios
- efficiency ratios

If a question pops up in the exam will I be given marks for throwing down ratios other than the list in the core reading?

Is there a reason why these ratios have been chosen? i.e.

Gearing
Investment yield
Dividend Yield
Dividend per share
Cash yield
Interest on debt
NAV
Discount to NAV
Total expense ratio

Why would ROCE, Profit margins, EPS, PER, income gearing, current ratio, stock turnover etc. not be used in a quantitative analysis?
 
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