There are basically 5 categories of financial statement


There are basically 5 categories of financial statement analysis that is employed to assess the health of companies related to their financial performance. They are generally classified as liquidity, efficiency, debt, profitability and market-based ratios.

Select 1 of the categories, and discuss the following:

  • What does each ratio in the category attempt to measure?
  • What individual ratios does it employ?
    • List at least 3.
  • Discuss each of the ratios that you have identified.
    • How is each calculated?
    • What does each measure?
    • What is the general rule of thumb associated is ratio?
    • How do you know if a ratio is improving or deteriorating?
    • And what are some of the weaknesses or limitations of each ratio?

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Finance Basics: There are basically 5 categories of financial statement
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