4. Ratio Analysis with Financial Statements
Understanding ratio analysis is foundational to making sense of financial and operations ratios. An organization’s successes and areas in need of attention from management are highlighted by performance ratio analysis. Ratios are used to evaluate the performance of an organization, an industry, and management personnel.
Financial statements were explained in detail in Chapter 3, providing a foundation to understand ratio analysis. This chapter will introduce many of the common financial performance ratios that executives and analysts use. In addition, the chapter will explain how to compute ratios, what information the ratios offer for decision making, and how to consider multiple factors that are critical ...
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