Financial Ratio
Indeed, I have witnessed that managerial accounting can be complex, especially from the experience I have gone through while calculating the financial ratio. In the calculations, some ratios were more difficult to calculate than others. Notably, this was the case with earnings per share, which offers information regarding the growth and valuation of a company, and the acid test ratio, which indicates a company’s liquidity. The earnings per share metric was difficult to establish because I realized I required information outside the balance sheet regarding income (Robinson, 2020). Further, if the income is revenue is a loss, it becomes even more difficult. With the acid test ratio, I found it challenging to ascertain cash equivalent items used in the calculation.
Most ratios I calculated were challenging to understand. I had to consult further studies and information from previous periods to understand objectively. For instance, I realized that understanding a company’s liquidity position provided by acid test ratio and current ratio requires comparisons between various periods and against those of other companies (Jackson, 2021). Also, information regarding the industry, such as industry ratios in which a company operates, is necessary to understand the ratios comprehensively. Obtaining this information and calculating them when they are unavailable is challenging. However, I will make some measures to curb the difficulties in the following weeks. I will spare enough time for studying and researching. That way, I will be able to calculate and interpret various metrics with ease. Also, I will consider collaborating with my coursemates in studying to make it easier.
References
Jackson, A. B. (2021). Financial statement analysis: a review and current issues. China Finance Review International. https://doi.org/10.1108/CFRI-10-2021-0208
Robinson, T. R. (2020). International financial statement analysis. John Wiley & Sons.
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Question 
Write a 250-word response reflecting on your experience making the calculations from the practice assignment. In your reflection, share your thoughts on the activities within this week’s readings. Consider how calculating financial statements will help drive effective business decisions.
Financial Ratio
Address the following questions within your response:
Which calculations were challenging for you? Why?
Which ratios were difficult to understand?
What will you do differently in the following weeks?
If you did not have any challenges, respond to the following questions:
What prepared you for these calculations?
What advice would you give a classmate who needs assistance?
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