Financial Ratios

Financial Ratios

    Financial Ratios

  •     Financial ratio means comparison of various figures from the financial statements in order to gain information about a company's performance. It is one of the main tools used for managerial decision making. Ratios may serve as indicators, clues, or red flags regarding noteworthy relationships between variables used to measure the firm's performance in terms of profitability, asset utilization, liquidity, leverage, or market valuation. It helps in trend analysis which involves comparing a single company over a period. It highlights important information in simple form quickly. A user can judge a company by just looking at few numbers instead of reading the whole financial statements.

     

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