Ratio Analysis is the process of identifying the financial strengths and weaknesses of the enterprise by logically establishing relationship between the items of Balance Sheet or Income Statement or both and interpreting the results there of in order to derive meaningful conclusions. In view of the requirement of various users (e.g., Short-term Creditors, Long-term Creditors, Management & Investors) of the ratios, one may classify ratios into the following four groups: а) Liquidity Ratios b) Solvency Ratios c) Activity Ratios d) Profitability Ratios You are required to pick any two from the aforementioned groups and discuss the various ratios calculated under these along with the purpose or objective of calculation of the individual ratios you are alluding to.
Ratio Analysis is the process of identifying the financial strengths and weaknesses of the enterprise by logically establishing relationship between the items of Balance Sheet or Income Statement or both and interpreting the results there of in order to derive meaningful conclusions. In view of the requirement of various users (e.g., Short-term Creditors, Long-term Creditors, Management & Investors) of the ratios, one may classify ratios into the following four groups: а) Liquidity Ratios b) Solvency Ratios c) Activity Ratios d) Profitability Ratios You are required to pick any two from the aforementioned groups and discuss the various ratios calculated under these along with the purpose or objective of calculation of the individual ratios you are alluding to.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Ratio Analysis is the process of identifying the financial strengths and weaknesses of the
enterprise by logically establishing relationship between the items of Balance Sheet or Income
Statement or both and interpreting the results there of in order to derive meaningful conclusions.
In view of the requirement of various users (e.g., Short-term Creditors, Long-term Creditors,
Management & Investors) of the ratios, one may classify ratios into the following four groups:
а)
Liquidity Ratios
b)
Solvency Ratios
c)
Activity Ratios
d)
Profitability Ratios
You are required to pick any two from the aforementioned groups and discuss the various ratios
calculated under these along with the purpose or objective of calculation of the individual ratios
you are alluding to.
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