Looking Good Ratio Analysis Explanation
Liquidity solvency efficiency profitability equity market prospects investment leverage and.
Ratio analysis explanation. This article comes in a series of articles written about the fundamental analysisPeople who are interested in long term investing in stocks knows about financial ratio analysis. Ratio 3 Quick acid test ratio. Ratio 5 Debt to total assets.
Ratio 2 Current ratio. Financial ratio analysis compares relationships between financial statement accounts to identify the strengths and weaknesses of a company. Aim of every business concern is to earn maximum profits in absolute terms and also in relative terms ie profit is to be maximum in terms of risk undertaken and capital employed.
Ratio 4 Debt to equity ratio. But in this financial ratio analysis we will go beyond these usual ratios. The benefit of ratio analysis depends a great deal upon the correct interpretation.
This revision video introduces the concept of ratio analysisalevelbusiness businessrevision aqabusiness tutor2ubusiness alevels edexcelbusiness busin. Financial Ratio Analysis - The simplest ever explanation of the concepts and major typesOwing to multiple requests we look at the concept of Financial Ratio. Profit making is the main objective of business.
Its objective is to offer a meaningful understanding of the performance and financial position of an enterprise. Ratio 1 Working capital. Ratio analysis is a very important factor that will help in doing an analysis of the fundamentals of equity.
Our explanation will involve the following 15 common financial ratios. It determines and interprets the relationships between the items of financial statements. Preparation of common-size financial statements.