Purpose of ratio analysis
Briefly describe the purpose of ratio analysis.
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The purpose of the ratio analysis is to appraise the financial performance and constancy of an entity. It aids internal and external users for analyze financial statements through examining ratios that illustrate the quantitative relationship between two data items. Ratios can be employed to carry out a trend analysis or they can be compared with the predetermined budget or preceding periods for same entity.
Write down the advantages of having conceptual framework.
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