Financial ratios are used in order to determine the relationship between various items of the financial statements and comparing them with the previous year’s performance or with any other firm in the industry and accordingly take decisions. To explain: The four categories of financial ratios.

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Chapter 5, Problem 5.16RQ

To determine

Introduction: Financial ratios are used in order to determine the relationship between various items of the financial statements and comparing them with the previous year’s performance or with any other firm in the industry and accordingly take decisions.

To explain: The four categories of financial ratios.

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