Entering a new business venturing is risky and using these ratios would help you understand the performance and minimize risk. If the business that you are contemplating investing in has only been in business for a year, I would look at the following:
1) Revenue of the company?
2) Marketability of the product.
3) Long term goals and strategy.
If you were an accountant for this business, how would you use these ratios to help run the business?
Please explain your answers.