Ratios Analysis In Financial Analysis

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Ratios analysis is quantitative analyses of financial statements. They can generally be categorized into profitability, liquidity, gearing and valuation ratios (BBP- P3, 2014). Ratio is used as a yardstick for assessing the financial position and business performance of the organization. It is a helpful tool to analyze and produce a meaningful interpretation of financial statements. This technique helps in decision making process and finding out the relationship between different trends and ratios (Accounting- Managment , n.d).

For my RAP, I have analyzed the following ratios for both Delta and its comparator: Operating Profit Margin This refers to the percentage of profit before interest and tax relative to the revenue generated from the core business activities during the specific time period. It is a
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• It is not used for quantification, but it is rather used for qualitative analysis.
• It does not indicate which environmental influences are more important than others, so managers may use their own subjective judgments (Emile Woolf, 2010).

2.4.3 SWOT analysis
SWOT analysis is a framework that identifies the strengths, weaknesses, opportunities and threats of an entity. It assesses what an entity can and cannot do. It also evaluates potential opportunities and threats. These can be divided into internal and external factors (Investopedia, n.d).
Internal factors
The strengths and weaknesses relate to the availability and utilization of resources and capabilities to establish what an entity is outperforming or underperforming and whether the available resources are enough or in short.
External factors Opportunities and threats relate to external factors such as the impact of economic changes, new technologies, new entrants to the market and powerful customer can have on the company’s operations and future (Kaplan P3,

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