Breathtaking Different Types Of Ratio Analysis
An introduction to the four different types of data.
Different types of ratio analysis. Introduction to Ratio Analysis 2. Profitability liquidity activity debt and market. A Liquidity Ratio of Ratio Analysis facilitates to identify whether the company has enough capability to meet short term obligationsrequirements.
Context is required to measure profitability which is provided by ratio analysis. Introduced in 1946 by the psychologist Stanley Smith Stevens these four categories are also known as the levels of measurement. Gross Profit Ratios Net Profit Ratio Expense ratio etc provide a measure of the profitability of a firm.
Mode Types Examples Steps Financial Statements Advantages and Limitations Introduction to Ratio Analysis. There are two main types of ratio analysis. In cross sectional analysis we compare the financial ratios of the underlying firm against its competitors and also against the industry average at a single point of time rather than over a period of time.
Rearrangement of Financial Statements 6. The management can use such ratios to find out problem areas and improve upon them. Steps in Ratio Analysis 4.
Current and Quick Ratios reveal the comparison between Current Assets and Current Liabilities suggest for necessary decision making. Modes of Expression of Ratios 3. In this article we will discuss about- 1.
This Accounts video for Class 12 about Different Types of Ratios and other important topics from the chapter Ratio Analysis will help you understand further. Broadly speaking whatever data you are using you can be certain that it falls into one or more of four categories. 2 Evaluation of Operational Efficiency.