RATIO ANALYSIS:
Ratio analysis is a commonly used tool of financial statement analysis. Ratio is a mathematical
relationship between one number to another number. Ratio is used as an index for
evaluating the financial performance of the business concern.
An accounting ratio shows the mathematical relationship between two figures, which have meaningful relation with each other. Ratio can be classified into various types. Classification from the point of view of financial management is as follows:
● Liquidity Ratio
● Activity Ratio
● Solvency Ratio
● Profitability Ratio
Ratio analysis is a commonly used tool of financial statement analysis. Ratio is a mathematical
relationship between one number to another number. Ratio is used as an index for
evaluating the financial performance of the business concern.
[Post Image Courtesy of CoolDesign at FreeDigitalPhotos.net]
An accounting ratio shows the mathematical relationship between two figures, which have meaningful relation with each other. Ratio can be classified into various types. Classification from the point of view of financial management is as follows:
● Liquidity Ratio
● Activity Ratio
● Solvency Ratio
● Profitability Ratio
Ratio Analysis
![Ratio Analysis]()
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