KEEPING TRACK: What Gets Controlled?
1 Keeping Track of an Organization’s Finances
Want to earn a profit? You need financial controls!
Traditional financial controls include:
Ratio analysis. (See Exhibit 15–6.) Ratios are calculated using selected information from the organization’s balance sheet and income statement.
Ekaterina Semenova/Fotolia
Exhibit 15–6
Popular Financial Ratios
OBJECTIVE RATIO CALCULATION MEANING Liquidity ratios: measure an organization’s ability to meet its current debt obligations Current ratio
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