A company s business strategy often leads to better performance on some financial statement ratios..

A company s business strategy often leads to better performance on some financial statement ratios rather than others. For example, management of a high-volume retailer may deliberately keep prices low, reducing the gross margin percentage, in order to achieve a high inventory turnover. Give an example of another conflict between financial statement ratios, where management’s attempt to improve one ratio may result in decreased performance on the other ratio.

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