Abstract
Although introductory finance texts may be clear and instructors may be thorough, students often exhibit an extremely superficial understanding of financial ratio analysis upon leaving their introductory classes. We find that students’ understanding can be enhanced by requiring them to justify why the opposite of their initial impression of a financial ratio may be correct. Thus, students – or other analysts – may be too quick to judge whether the value of a particular financial ratio is “good” or “bad.” This approach requires little additional classroom time, yet seems to create a better understanding of the interrelated financial variables comprising the ratios
Recommended Citation
Sackley, William H. and King, Roger T.
(2004)
"Justifying the Opposite: A Pedagogical Reminder for those Teaching Financial Ratio Analysis,"
Journal of Economics and Finance Education: Vol. 3:
Iss.
1, Article 6.
Available at:
https://scholarship.rollins.edu/jefe/vol3/iss1/6
