Top Notch Types Of Ratio Analysis
Ratio analysis is an important tool that is used in inter-business and intra-business comparison.
Types of ratio analysis. Financial ratios are grouped into the following categories. Gross Profit Ratios Net Profit Ratio Expense ratio etc provide a measure of the profitability of a firm. 2 Evaluation of Operational Efficiency.
There are a lot of financial ratios which are used for ratio analysis for the scope of Class 12 Accountancy students. Profitability liquidity activity debt and market. Learning Objectives Classify a financial ratio based on what it measures in a company.
Ratio analysis is a quantitative method of gaining insight into a companys liquidity operational efficiency and profitability by studying its financial statements such as the balance sheet and. Categories of Ratio Analysis. There are a number of categories that are used to group the different types of ratio analysis.
Ratio Analysis are considered as a powerful tool among the various tools of financial statement analysis. Ratio analysis is broadly classified into four types. Rearrangement of Financial Statements.
Ratio Analysis is done to analyze the Companys financial and trend of the companys results over a period of years where there are mainly five broad categories of ratios like liquidity ratios solvency ratios profitability ratios efficiency ratio coverage ratio which indicates the companys performance and various. Uses and Users of Financial Ratio Analysis. Financial ratios can be grouped into the following clusters of ratios where each cluster is targeted at a different type of analysis.
The management can use such ratios to find out problem areas and improve upon them. Types Of Ratio Analysis. The following groups of ratios are considered in this article which are as follows.