You have previously been exposed to the 'Introduction and analysis' of financial statements in previous sections of this course. From now you might have acquired several familiarities along with financial ratios that give basic relations about several aspects of a business. You might have observed that the financial media as magazines like Fortune India, dailies like Economic Times, Business India Business World, Financial Express and Business Standard, among lots of others presents many of these ratios to analyze the weaknesses and strengths of individual business firms. Moreover, the Bombay Stock Exchange makes one of the most exhaustive efforts in the country to analyze financial data of various companies by a set of 21 ratios. An internationally cited utilize of ratios comes in the ranking of the 500 largest corporations through a financial bi-monthly that is: Fortune International. This exercise is depends on five basic parameters are as Sales, Net Income, Assets, Stockholders Equity and various employees. The nine rating measures derived by these parameters are as: sales change, net income, profits change, as a percent of sales, net income as a percent of stockholders equity, 10-year growth in earning per share, net return to investors through latest year and 10 year average, assets per worker and sales per worker.
This is not an exhaustive list and you may come across many more sources of published ratios combining the individual companies, many of that now provide summarized financial information and ratios for the past five or ten years. The point is that users of ratios are vast, ratios which emerge from financial data are numerous and uses to that these ratios can be put are several.