Financial Management -2D1

 IMPACT OF INFLATION ON RATIOS

Inflation can have significant effects on income statements and balance sheets, and therefore on the calculation of ratios. Discuss the possible impact of inflation on the following ratios:

• Return on investment
• Inventory turnover
• Fixed asset turnover
• Debt-to-assets ratio

Also, explain the direction of the impact based on your assumptions.

SHOULD BE 1 FULL PAGE + REFERENCE