Smart Business Ratio Analysis
Aim of every business concern is to earn maximum profits in absolute terms and also in relative terms ie profit is to be maximum in terms of risk undertaken and capital employed.
Business ratio analysis. The use of financial ratios is a time-tested method of analyzing a business. Ratios are just a raw computation of financial position and performance. Wall Street investment firms bank loan officers and knowledgeable business owners all use financial ratio analysis to learn more about a companys current financial health as well as its potential.
Ratio analysis is frequently used by business owners. Ratio analysis is the act of using various components of financial information in order to provide a snapshot of a companys financial health. There are many different ratios available but some like price-to-earnings ratio.
In a sense financial ratios dont take into consideration the size of a company or the industry. Profit making is the main objective of business. Ratio analysis can be used to compare the year to year profitability liquidity and efficiency of a business or similar businesses.
It strives to ensure that the customers visiting the restaurant. Blue Regency is a wonderful example of a case study on business. Ratio analysis is a quantitative method of gaining insight into a companys liquidity operational efficiency and profitability by studying its financial statements such as the balance sheet and.
Ratio analysis is a method of analyzing a companys financial statements or line items within financial statements.