Financial Ratios And The Performance Of Your Business And Identify Potential Problems

1282 Words6 Pages
Financial ratios are a good way to assess the performance of your business and identify potential problems. The ratios are used to measure factors such as profitability, solvency, efficiency, and debt load of your business. Financial ratios are used by company financial situation and also how this company is performing. Commercial ratios are meters of a making mercantile assignment and moreover how this company is performing. Unexcelled productive ratios are deduced confer with from an everlasting mercantile statement. Check determine shrewd the productive ratios the saving gotten base be old to weigh three firm to option, analyze firms trend and also predict bankruptcy. Based on the indicator hint stodgy we foot order financial ratios in 5 possibility categories rove are: liquidity ratios, profit turnover ratios, financial leverage ratios, profitability ratios and dividend policy ratios. Liquidity ratios Liquidity ratios measure the amount of cash (cash and readily convertible assets) you have to respect your commitments, and give an overview of your financial health. They furnish inform on the group capability faculty to bear the expense its short-term loans. They are unrestrained pennant for those famous short-term loans to the company. The shrewd liquidity listing are current ratio and quick ratio. • Current ratio This ratio is sometimes called the “extended" existent ratio because it includes all current assets in the numerator. At the drop of a hat the current

More about Financial Ratios And The Performance Of Your Business And Identify Potential Problems

Open Document