Smart Different Financial Ratios
Likewise banks also use various ratios to measure the financial health of a company.
Different financial ratios. Why are they important. However all the ratios are not used by everyone on a regular basis. Importance of Different Ratios to Different User Groups.
Why is it important for investors to understand the different financial ratios. How could this impact you as a customer. Learn how to compute and interpret financial ratios through this lesson.
How could this impact you as a customer. Financial ratios are often divided up into seven main categories. Classification of financial ratios on the basis of function.
On the basis of function or test the ratios are classified as liquidity ratios profitability ratios activity ratios and solvency ratios. Financial ratios can be classified into ratios that measure. In a rating or stock analyst report you will find a myriad of ratios.
Liquidity solvency efficiency profitability market prospect investment leverage and coverage. Profitability liquidity management efficiency leverage and valuation growth. Financial ratios are relationships determined from a companys financial information and used for comparison purposes.
How can you utilize financial ratios in your personal finances. A financial ratio is an integral part of the financial analysis of the company. Why is it important for banking institutions to understand the different financial ratios.