veejay,
DO NOT SKIP FINANCIAL RATIOS, they are a big part of the exam. Memorize the big ones such as the LIQUIDITY RATIOS!! If I were you, I'd focus myself on memorizing these ones (and they are not that difficult to know).
Tip:
When they ask for TURNOVER RATIOS, just know that the denominator is always the AVERAGE of what “______” turnover they are asking for.
Example:
AR Turnover, denominator is AVG AR
AP Turnover, denominator is AVG AP
INV Turnover, denominator is AVG INV
Total Asset Turnover, denominator is AVG Total Asset
Etc.
As for the numerator, just remember the accounts that are affected by the denominator
Example:
AR affects the SALES account, so the numerator is Net Sales
AP related to COGS, so the numerator is COGS
INV affects COGS, so numerator is COGS
Etc.
As for the analyzing of these ratios, you cannot memorize but must understand how accounts affect each other.
I just found it helpful to remember this first step:
If for example the AR Turnover decreased, then the numerator either decreased or the denominator increased.
(Just remember VISUALLY that if the quotient decreased, then the numerator probably decreased or the denominator increased… it also works the other way: If the quotient increased, then the numerator probably also increased or the denominator decreased….. This is what made it click for me)
Once you figure out what happened in the formula, then you can read the choices given in the MCQ like what accounts increased or decreased — Apply what they give you in the formula above.
I hope that helps!
.