You are thinking of purchasing some common stock. Now that you are studying aboutfinancial statement analysis, you want to use it to analyze some different stocks.•Of the many ratios that we are studying, explain four different ratios that you think arethe most important, what they tell you, and why they are the ones that you picked.1) Current ratios: This is also known as working capital ratios, the formula used to calculate thisratio is current ratio= current assets/current liabilities. According to the text it is a more definitivemeasurement of a firm’s ability to pay those current liabilities than the working capital, as wellas making comparative analysis between companies. Most times a firm will receive more favor ifit has a higher current ratio, this also makes it easier to determine who short-term credit can begranted to.2) Return on Total Assets: This ratio is a … Purchase document to see full attachment