Casual Financial Ratio Analysis And Interpretation Report
Analysis and Interpretation of financial statements help in determining the liquidity position long term solvency financial viability and profitability of a firm.
Financial ratio analysis and interpretation report. These relationships between the financial statement accounts help investors creditors and internal company management understand how well a business is performing and of areas needing improvement. Ratio analysis shows whether the company is improving or deteriorating in past years. An activity ratio relates information on a companys ability to manage its resources that is its assets efficiently.
Ratio Analysis 1 P a g e Introduction A sustainable business and mission requires effective planning and financial management. To interpret the numbers in these three reports it is essential for the reader to use financial ratios. The percentage of gross profit to sales or the working capital ratio.
FINANCIAL RATIO TREND ANALYSIS SUMMARY In general a thorough financial analysis of any business would include a study of the following financial information. It is only a means of understanding of financial strengths and weaknesses of a firm. 111 Use and significance of ratio analysis- The ratio is one of the most powerful tools of financial analysis.
Financial analysis report Your financial analysis report highlights the financial strengths and weaknesses of your business. He reliance on the information on the analysis is however limited due to some factors. One popular ratio is the current ratio which is current assets divided by current liabilities.
Ratio analysis is used to judge the financial success of an economic entity. 2 Interpretation Here the results of analysis are used to judge a business performanceThis is done by making comparisons a with other similar businesses usually within the same year eg. Secondary data is gathered from the companies annual reports.
It is used as a device to analyze and interpret the financial health of enterprise. The provided reports include two-year comparison reports five-year trend analysis reports industry and group comparison reports definitions of categories and ratio formulas. Ratio analysis is widely used as an efficient means of analysing financial statements.