Ratio Analysis

“Ratios are highly important profit tools in financial analysis that help financial analysts implement plans that improve profitability, liquidity, financial structure, reordering, leverage, and interest coverage.”




After reading the chapter, you will be able to:

  1. Understand the concept and rationale of ratio analysis.

  2. Classify various types of ratios.

  3. Understand the calculation of different categories of ratios.

  4. Look at the limitations of ratios.


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