Ratios Calculated
Year 1 Year 2 Year 3
Price-to-cash-flow 6.00 7.80 8.74
Inventory turnover 12.00 14.40 16.13
Debt-to-equity 0.30 0.32 0.38

Based on the preceding information, your calculations, and your assumptions, which of the following statements can be included in your analysis report? Check all that apply.

A. An improvement in the inventory turnover ratio could likely be explained by the new sales-forecasting strategies that led to better inventory management.
B. The market value of Cute Camel Woodcraft Company's common shares declined over the three years.
C. Cute Camel Woodcraft Company's ability to meet its debt obligations has worsened since its debt-to-equity ratio increased from 0.30 to 0.38.
D. The company's creditworthiness has improved over these three years as evidenced by the increase in its debt-to-equity ratio over time.

Reliability and validity reliability and validity are two important considerations that must be made with any type of data collection. reliability refers to the ability to consistently produce a given result. in the context of psychological research, this would mean that any instruments or tools used to collect data do so in consistent, reproducible ways. unfortunately, being consistent in measurement does not necessarily mean that you have measured something correctly. to illustrate this concept, consider a kitchen scale that would be used to measure the weight of cereal that you eat in the morning. if the scale is not properly calibrated, it may consistently under- or overestimate the amount of cereal that’s being measured. while the scale is highly reliable in producing consistent results (e.g., the same amount of cereal poured onto the scale produces the same reading each time), those results are incorrect. this is where validity comes into play. validity refers to the extent to which a given instrument or tool accurately measures what it’s supposed to measure. while any valid measure is by necessity reliable, the reverse is not necessarily true. researchers strive to use instruments that are both highly reliable and valid.