Ratio Analysis

Ratio Analysis:

• It is very helpful for the analysis of financial purpose.

• It is helpful for the purpose of comparing of risk and relationship between firms of different sizes.

• It is used to determine strength and weakness of firm and past performance of the firm can be determined.

• It helpful to determine current financial conditions of the firm.

• Ratio refers to numerical or quantitative relationship between two variables/items.

• It doesn’t give improvement in financial or business earnings but it is helpful to estimate where the financial or business earnings gone low or its gone high, and also it helps to determine to get the view of where the performance lagging.

• It gives information on the data which we arrived in performance of business.

Types of Ratios