whatis ratio analysis and methods of its calculation.
Answer Posted / sonali
Ratio analysis mean calculating and comparing various
ratios derived from a companies financial statements.
Types of ratios:
Leverage ratio: The extent of debt in companiy's capital
structure.
Profitability ratio: shows return on sales and capt employed
Operational ratio : company's efficiency of undertaking the
operations and utilization of assets
Liquidity ratio: Company's efficiency to meet the short
term obligations.
Solvency ratio: Company's efficiency to generate the cash
flows to meet its financial obligations.
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