What are categories of ratios for financial position and performance?
Usually, there are four main categories of ratios every attempting to measure the financial position and performance of a firm. These are as follows:
1. Liquidity Ratios: It is reflect the firm’s capability to meet scheduled short time obligations
2. Activity Ratios: It tells how the firm is managing different classes of assets.
3. Leverage Ratios: It is showing how much debt the firm has used to finance its investments.
4. Profitability Ratios: It is designed to reflect the profitability of the firm.