Discussion Question:
Define the major financial indicators and ratios used to assess financial standing, and for the purpose of financial analysis of a corporation. State the significance of each.
Q. Read the below paragraph and write what you think about it. If possible give any real time example. You can ask the questions if any.
Financial ratios help an organization's owner or its potential and current investors to better comprehend the general strength of the organization and also its condition in different particular classifications.
What's more, following financial ratios over some stretch of time is an effective method to recognize trends in their early stages.
Ratios are likewise utilized by lenders and business experts to decide an organization's money related standards and stability.
Financial ratios can be divided into four categories:
Liquidity Ratio, Solvency Ratios, Profitability Ratios, Activity Ratio