Answer Posted / neha

Ratio Analysis is a method to analyse the financial
situation of a firm using various ratios drawn from the
financial statements. It basically ascertains the financial
strength of a firm for the purpose of
inter-company/intra-company comparison. This aids managers
in decision making, policy formulations and budgeting. It is
calculated in terms of ratio (eg. 5%) or proportion (eg.
5:1) or times (eg. 5 times)

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