Financial
Ratios are useful indicators of a firm’s performance and financial
situation. Most ratios can be calculated by information provided by the
financial statements. Financial ratios can be used to analyze trends and to
compare the firm’s financial to those of other firms.
Classification
of Ratios
Ratios
can be classified in a number of ways.
-
Profitability:
The ratios in this section measure the ability of the organization to
make Profit.
-
Liquidity:
Financial ratios in this category measure the company's capacity to pay its
Debts (short-term financial
obligations) as they come due.
-
Asset
turnover: Asset Turnover Ratio measures how efficiently the firm
utilizes its assets.
-
Financial
Leverage: Long term solvency of the firm.
It measures the extent to which the firm is using long-term debt
Few
Calculators are mentioned below for finding out important ratios:
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